Sun Microsystems Inc. plans to cut up to 6,000 jobs, or 18 per cent of its global workforce, as sales of its high-end computer servers decline.
The drastic move announced yesterday highlights Sun’s desperation to eliminate costs and survive as an independent company. Sun’s shares have fallen steeply, driving the company’s market value below its cash on hand.
That means investors believe the company is essentially worthless. After eight years of devastating financial problems and multiple attempts at restructuring, Sun’s latest woes have increased speculation that one of the most storied names in computing could be snapped up by a bigger rival. The company, based in Santa Clara, Calif., said the cuts will include between 5,000 and 6,000 of its 33,000 employees over the next year. The cuts should save an estimated $700 million (U.S.) to $800 million annually.
“These are hard but necessary changes,” Jonathan Schwartz, Sun’s chief executive, said.
