Sun Lays Off up to 5,000 Workers

Sun Microsystems laid off workers in the United States, Canada, Europe and Asia on Friday as part of belt tightening that is expected to claim up to 5,000 jobs at the beleaguered company.

Sun would not say how many jobs were eliminated, but the cuts went across all staff levels, including vice presidents and directors.

Sun Chief Executive Officer Jonathan Schwartz implemented a restructuring plan after taking over from company cofounder Scott McNealy in April. The cuts, which include selling real estate, are part of a plan to save between US$480 million to $590 million annually, the company said.

Investors should see the results from the cuts by July 2007, Sun said. The company is trying to bring its costs in line with its income and has set a goal for operating income of 4 percent of revenue by then, with that figure rising to 10 percent over the long term. In the quarter that ended June 30, Sun had an operating loss of 8.75 percent of its revenue.

Sun’s recent earnings announcement did have a bright spot. Net revenue increased to $3.8 billion from $2.9 billion from the previous year’s quarter, boosted by its services division and Solaris 10 OS sales.

By Jeremy Kirk, IDG News Service (London Bureau)

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