Thursday, June 01, 2006

Sun Micro to cut up to 5,000 jobs

Sun Micro to cut up to 5,000 jobs

US computer company Sun Microsystems is to cut up to 5,000 jobs, or 13% of its workforce worldwide, in an attempt to turn around five years of losses.

The firm aims to eliminate the jobs over the next six months, which it said should yield annual cost savings of up to $590m (£313m).

But the restructuring plan is expected to cost Sun up to $500m over the next few financial quarters.

The firm wants to regain market share from rivals Dell and Hewlett-Packard.

New boss

At the end of April, Sun's co-founder and chief Scott McNealy announced he was stepping down.

Former chief operating officer Jonathan Schwartz took the helm as chief executive.

That news came as the US firm revealed third quarter losses had widened to $217m (£121.4m) from $28m at the same time a year ago.

Shares in the company are currently languishing at about 90% lower than the highs hit during the dotcom boom of 2000.

Sun is the world's fourth biggest maker of server computers, used to operate websites and corporate networks.

In June 2005 it made a move to boost its earnings by buying a major player in the data storage market, Storagetek, for $4.1bn.

Last year it also announced a tie-up with web search engine giant Google, aimed at challenging the dominance of Microsoft's Office suite of word processing and spreadsheet software.

Story from BBC NEWS: