Will job cuts work for Sun?

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Sun Microsystems cutting up to 5,000 jobs

Last Updated Wed, 31 May 2006 18:37:57 EDT
CBC News

Sun Microsystems Inc. plans to cut between 4,000 and 5,000 jobs as it tries to bring its finances back into line.

The cuts will reduce Sun's 37,500-person work force by about 12 per cent over the next six months.

The once mighty high-tech supplier from Santa Clara, Calif., did not say where the cuts would be made. However, the company plans to sell property it owns in Newark, Calif., and to exit leases at a site in Sunnyvale, Calif.

Wednesday's announcement comes a month after Scott McNealy stepped down as Sun's chief executive. It is one of the first big initiatives to be taken by his successor, Jonathan Schwartz.

The company, one of the world's biggest suppliers of the large computer servers that run corporate networks and websites, was once a Wall Street darling. But it has struggled since the dot-com bubble burst in late 2000.

Investors have driven down Sun shares from a high of about $64 in September of 2000 to a range of about $3.50 to $5 over the past year. Some analysts have criticized Sun's management for not cutting costs more dramatically.

Sun (NASDAQ:SUNW) shares rose six cents or 1.3 per cent in after-hours trading following the announcement.

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In case you want to see how the stock has been doing: http://www.cbc.ca/story/business/nat...1/sun-wed.html

the question is though, will this work? in my view, however, most companies cut jobs as a knee-jerk reaction, and may get the short term gains, while in most cases, sacrificing long term goal. it appears however, in this case, Sun has tried other avenues to regain their market share, but are left with this option. time will tell.

My cynical answer is "no it won't"..............this is posturing crap for Wall Street.

Are they seriously suggesting that they are 12% overstaffed right now? How could that happen?..........not through the CEO alone?

I am willing to bet that the ones they get rid of are productive and the ones they keep are the drones.............or they will outsource them to move the cost to a different part of the budget and profit and loss statement :rolleyes:

"Circle the waggons folks"............ack! phtt! the number of times I have seen this before.

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The once mighty high-tech supplier from Santa Clara, Calif.,

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..............soon to be relocated to Bejing? ;)

Point is that these days, US companies no longer close down their overseas operations and retreat back to the USA.................they have done all that already. Now it is US jobs going overseas.

Good luck folks :(

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Are they seriously suggesting that they are 12% overstaffed right now?

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I would have to say yes. I had several good friends that worked for Sun in the past few years. They all left the company because they saw there were too many people doing the exact same jobs and that it couldn't last. These were SE/SSE type positions, and once those are too overfilled then you know the company is overstaffed.

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These were SE/SSE type positions

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I doubt if those will be the ones to go...............any production will certainly get outsourced to China. Not only will that cut the headcount, it would greatly cut manufacturing costs.

You need your SE/SSEs as they speak English and are your customer contact layer ;)

They may well find themselves issued with a box of screwdrivers though :D

heh, just talked to one of the former Sun SSEs that I mentioned. He said they /need/ to cut those jobs, so they can sell out to Apple. Then his stocks will convert from Sun to Apple and stop sucking. :)

He reiterated that from the inside you can even see that there are too many people doing the exact same things.