Sun Microsystems to reduce jobs

In the midst of a predicted prolonged economic gloom, Sun Microsystems has announced that it plans to cut up to 18% of its workforce; that is 5,000 to 6,000 employees.

The move comes as business and orders weaken due to the global financial crisis. Hewlett-Packard, Yahoo, eBay, Applied Materials and SanDisk are amongst other technology companies to declare profound job slashes in recent weeks, and bellwether firms Intel and Cisco have pronounced a decrease in demand and sales slowdowns.

Many start-up companies have also slashed jobs as the economic crash that began in housing and infected the financial sector destabilizes technology niches from chips to peripherals to computing.

The objective again is to remain flexible and competitive while reducing costs across the board in order to ride out the financial storm. The cutting of costs will save anywhere between $700 and $800 million annually for the company, helping with much needed cash flow. Indirectly, it has been hit by the slowdown in the housing market and the problems of risky mortgages.

Their clients are going out of business because they cannot afford their business mortgages and hence Sun Microsystems contracts have been cut short and their orders stagnant. It is all linked, like a domino effect, one major market tumbles and the trickle down effect happens affecting the livelihood of banks, businesses, jobs and people in general. Realigning and restructuring their operations is imperative for Sun Microsystems at this point in time. The quicker it can act, the better its resolve.
Sun's restructuring is expected to reduce expenses by about $US700 million to $US800 million annually. It expects total restructuring charges in the range of $US500 million to $US600 million over the next 12 months.