Sun Begins Carrying Out Planned Layoffs

UPDATED: Sun confirms that layoff notifications were sent to about 1,300 employees as the result of its action Nov. 14, 2008. Reductions were made across all levels, including vice presidents and directors, the company says.

Sun Microsystems, which revealed on Nov. 14, 2008, that it planned to reduce its global work force by 5,000 to 6,000 employees-15 to 18 percent-began carrying out that dreadful duty Jan. 22.

Sun confirmed that layoff notifications were sent to about 1,300 employees as part of that action. Reductions were made across all levels, including vice presidents and directors, the company said.

Sun currently employs about 33,500 full-time employees. None of the layoffs will affect contractors, Sun spokeswoman Dana Lengkeek told eWEEK.

In a statement, Sun said it "continues to make choices to align strategically, geographically and operationally with its plan for long-term growth. We believe the restructuring will result in a more efficient coverage model with resources aligned to growth opportunities. We believe the number of positions that will be eliminated, when combined with the other cost-cutting measures and organizational changes being implemented, will put the company on track for improved financial performance."

Sun employee David Herron, known as RoboGeek and a co-developer of Robot and several other things related to Java testing, was one of many hit by the layoff.

Herron wrote this in his final Sun blog entry: "Last day @ Sun: There's probably going to be a few of these goodbyes posted on blogs.sun.com. Today is the big day when many of us are being set free to our fates, to roam the wastelands that exist beyond employment. Wish us luck. I've been informed today is my last day of employment at Sun."

Another Sun employee, Sara Dornsife of the OpenSolaris marketing team, reported on her Facebook and Twitter pages that she had been laid off.

Lengkeek said that all layoffs in this round will be completed by the end of the company's fiscal Q1, which ends Sept. 30, 2009.

Sun will reveal its Q2 financial report next Tuesday.

Sun has struggled for nearly a decade

Sun has faced hard times since about 2000, when the bottom fell out of the high-end workstation market and began a major shift to x86-type servers and open-source software. Sun has embraced Linux, MySQL, OpenSolaris, open-source Java and other open-source products and services, but many industry observers believe the changeover came too late in the game.

In a related item, longtime open-source community leader Matt Asay of Alfresco noted in his "Open Road" blog that the market capitalization of enterprise Linux vendor Red Hat is almost equal to Sun's.

"In what may come to be seen as a deeply symbolic moment in the history of operating systems, Red Hat is on the verge of surpassing Sun Microsystems' market capitalization for the first time. Sun, perhaps unfairly, represents a fading Unix market. Red Hat, for its part, represents the rising Linux market," Asay wrote.

"As I write this, Red Hat's market capitalization sits at $2.62 billion, while Sun is just ahead, at $2.7 billion. The stock prices are way out of whack with revenues: Red Hat pulled in $627 million in 2008. Sun? More than $13 billion.

"Such is Wall Street's confidence in Red Hat's Linux focus, however, that the market capitalizations between the two companies are almost at parity. ... Given enough time for its open-source strategy to play out, Sun's market capitalization will likely recover and outpace Red Hat's."