Sun to slash 5000 Jobs in next Six Months

World's No. 4 maker of server computers, Sun Microsystems announced Wednesday that it will cut 4,000 to 5,000 jobs or 11 percent to 13 percent of its 37,500 work force, in the next six months as part of a plan to end almost five years of losses.

Headquartered in Santa Clara, California, Sun Microsystems Inc. said that beside the job-cuts it will sell some facilities in a restructuring to save the troubled maker of computer servers up to 590 million dollars a year.

This move is expected to cost $ 340 million to $ 500 million, mostly in this quarter, with an annual savings between $ 480 million and $ 590 million.

Sun - A vendor of computers, computer components, software, and information technology services, said that in addition to cutting the jobs over the next six months, it would sell its campus in Newark, California, and its leased facilities in Sunnyvale, California.

The specified job cuts of its 37,500 workforce will leave Sun with between 32,500 and 33,500 employees.

The job-cuts move, which would be the first key cycle of job cuts for Sun since the company shed over 3,000 jobs when it reached a settlement in its antitrust case with Microsoft in 2004, comes a little more than a month after Jonathan Schwartz took over as Chief Executive, on April 24, of Sun from Scott McNealy, who remains chairman, to turn the company around as it competes with rivals such as Hewlett-Packard Co.

CEO Schwartz, who came up with the changes, biggest so far, pledged a 90-day review of operations to prompt profit and retake market share from Hewlett-Packard Co. and Dell Inc. McNealy had opposed staff reductions at Sun, whose servers run corporate networks and Web sites.

Schwartz said, “We absolutely believe we can continue to grow," adding that the job cuts are aimed at helping Sun become a "leaner and more efficient company."

Shares of Sun ascended about 1.5 per cent in late trading to a high of 4.70, after closing up eight cents at 4.63 in the regular trading session in NASDAQ stock market.

Sun Microsystems Inc. said that beside the job-cuts it will sell some facilities in a restructuring to save the troubled maker of computer servers up to 590 million dollars a year.