Sun cuts up to 18% of its global workforce

Things aren’t getting any better for many technology companies with the current economy. More and more firms are failing to reach profit goals and are announcing drastic cost saving measures including layoffs and restructuring to get profits back into the black.

The latest company to announce restructuring and layoffs is Sun Microsystems. Sun announced today that it was restructuring its software operations and shedding up to 6,000 employees. The layoffs will cut 15% to 18% of Sun's global workforce and executive departures including Rich Green, the executive vice president of software.

Sun says that the restructuring will result in a charge of $500 million to $600 million over the next year. About $375 million to $450 million of the charge will come in the current fiscal 2009 year. Cost savings will be realized beginning in Q3 of the current fiscal year.

Sun's software organization will split into new business groups including groups for Application Platform Software, Systems Platforms, and Cloud Computing & Developer Platforms. CNET News reports Sun says its focus will be on "boosting open-source momentum and growing new sectors of the market who view technology as a competitive weapon."

Each group gets a new leader with Systems platform led by John Fowler, Cloud Computing led by Dave Douglas, and CMO Anil Gadre running the Application Platform Group.

The layoffs and restructuring comes arte Sun announced a significant 7% drop in revenue for fiscal Q1. Sun posted a net loss of $1.68 billion for the quarter compared to a net profit of $89 million a year ago. The company missed analyst projections of $2.06 billion for the quarter.

Despite the losses, Sun is in a better position than some. Sun says that it has enough cash reserves to weather the poor economy with $3.12 billion in marketable securities and cash on hand.

"Mac OS X is like living in a farmhouse in the country with no locks, and Windows is living in a house with bars on the windows in the bad part of town." -- Charlie Miller
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