Sun to axe more jobs

3,700 and counting

By Cade Metz in San Francisco • Get more from this author

Posted in IT Channel, 7th August 2007 18:27 GMT

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More layoffs are on the way at Sun Microsystems. Despite its third consecutive profitable quarter, the Silicon Valley server giant will cut an unspecified number of jobs by the end of this year.

Early last week, according to a new filing with the Securities and Exchange Commission, Sun's board of directors approved a plan to "better align the company's resources with its strategic business objectives, including reducing its workforce." As it hands out severance pay, the company expects to spend between $100m and $150m on the plan "over the next several quarters".

On July 30, Sun announced profits of $329m for its fiscal fourth quarter, after posting a net loss of $310m during the same quarter last year. But just two days later, the board approved the new job cuts.

Since taking the helm in April of 2006, Sun CEO Jonathan Schwartz has already laid off over 3,700 workers, and it seems the company will continue with this strategy as it aims to boost profits yet again. In announcing its fourth quarter earnings during a conference call with industry analysts last week, the company said it planned to achieve operating margins of at least 8 per cent in the fourth quarter of 2008 and at least 10 per cent for fiscal year 2009.

The company's goal for the fourth quarter of this year was an operating margin of four per cent, and it significantly exceeded that goal, hitting 8.5 per cent.

Sun did not immediately respond to multiple requests for comment. ®

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