Management Toolkit

Hundreds of Sun employees laid off

Stephen Shankland CNET News

Published: 04 Aug 2006 11:10 BST

Sun Microsystems on Thursday notified hundreds of employees that they'll be losing their jobs, the second phase in a plan to cut 4,000 to 5,000 workers.

About 950 employees were notified in the United States, and approximately the same number elsewhere in the world, Sun spokeswoman Stephanie Hess said. The cuts spanned a range of Sun operations, she said.

The first wave of cuts took place in June, and the overall layoff will be finished by the end of June 2007, the end of Sun's first full fiscal year with new chief executive Jonathan Schwartz at the helm.

Sun's last quarter was unprofitable in part because of charges associated with the layoffs, but the company reported revenue of $3.8bn (£2bn), more than the $3.6bn Wall Street analysts expected.

Schwartz's promotion and the job cuts led UBS Warburg analyst Benjamin Reitzes to suggest on Thursday that Sun has the same ingredients for a turnaround that Xerox had earlier in the decade.

"Many aspects of the potential turnaround seem familiar," he said in a report. "Both have large, sticky customer bases, high market share, hidden assets, bloated cost structure and solid cash flow potential...We believe shares represent a compelling value."