Sun reorganizes, cuts up to 18 percent of workforce
Sun is laying off 15 percent to 18 percent of its employees as part of a restructuring plan aimed at saving $700 million to $800 million a year, and its top software executive is leaving the company, Sun said Friday.
The cuts will affect between 5,000 and 6,000 employees. Sun is also reorganizing its software division, a move it said stands as "a recognition of the comprehensive role software plays in the company's growth strategy."
In addition, Sun said that Rich Green, the company's executive vice president of software, has decided to leave the company. Sun said Green "has been an instrumental force in evolving Sun's Software strategy and successful business execution across its diverse portfolio."
Sun's software division changes include a new group, Application Platform Software, which includes Sun's MySQL database and infrastructure technology like the GlassFish application server.
The Cloud Computing & Developer Platforms group will focus on Web-based services as well as Sun's NetBeans development platform. Also, Sun's Solaris, virtualization and system management software teams will be moved into the company's systems group.
All changes are effective immediately, Sun said.
Sun said the economy sparked the changes.
"Today, we have taken decisive actions to align Sun's business with global economic realities and accelerate our delivery of key open source platform innovations," CEO Jonathan Schwartz said in a statement.
At the end of October, Sun blamed the downturn in the financial sector for a $1.68 billion quarterly loss. The collapse of Wall Street over the last two months eliminated several key Sun customers.
Sun has also been struggling overall for some time due to slumping sales of its high-end servers.
Angry Sun shareholders have been pressing company officials to improve its performance. Sun's share price has fallen from about $17 at the beginning of this year to roughly $4 at the start of trading Friday.
"The fact that the stock has been diving and diving and diving and is never pulling out of this dive, you start to wonder -- how long can you keep diving before you lose all your stockholders?"one shareholder said during the company's recent shareholder meeting. "How long can you be in freefall and still survive?"
Schwartz told the crowd that Sun is trying to reinvent itself by developing new server systems and attracting new customers with its open-source software portfolio. But that strategy has not borne fruit quickly.
To that end, the scale of Sun's layoffs was not out of line, said Stephen O'Grady, an analyst with Redmonk.
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Management Mistakes
I was a previous Sun employee; got laid off in 2005.Unfortunately, Sun does NOT want to learn from its own mistakes.
Due to its rapid abrupt increase in manpower in the dotCom build up, from 24,000 to 44,000 employees in just 3 years from 1998 to 2001, Sun filled most of its middle management posts with persons of mediocre capabilities, below average people who just were lucky to rise over the Management rungs because of nepotism or connections.
Those incapable middle management made a lot of serious mistakes; yet Sun laid off so many competent engineers [and by the way, Sun once had and probably still has top calibre engineers] instead of laying off the main reason for the financial slump, namely those incapable managers.
However, do you expect a level 3 or 4 manager to layoff another level 2 or 3 manager ?? it is easier to layoff and independent worker.
Sun has lost its vision and focus; from outsourcing its Tech Support services, to open-source everything, to acquiring database engines just becuase Oracle dropped Solaris as their main development platfrom, ..etc continues a series of grave middle amangemnt mistakes of a once great company.
Reminds me of SGI [Silicon Graphics] or Burroughs or DEC [Digital Equipment Corporation] all now extinct by virtue of incapable managers despite the many top calibre engineers they once employed.