Sun cuts 3,000 jobs as it awaits EU approval of Oracle deal


22 Oct 2009

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Server and software company Sun Microsystems has announced it’s to lay off 3,000 of its workers under a new restructuring plan.

Sun said in a statement that due to the delay in closing Oracle’s acquisition of its business, it had approved a restructuring plan that would include 3,000 jobs being cut from its workforce across the North America, EMEA, APAC and Emerging Markets regions over the next 12 months.

This means the ball is now firmly in the court of the European Commission, which has opened an in-depth investigation into the proposed US$7-billion acquisition of Sun by Oracle.

While Sun made no reference to the European Commission’s part in the delay in closing Oracle’s acquisition of its business, the inference was there to be drawn.

EU approval represents the final regulatory hurdle the Sun/Oracle deal has to overcome. Following several months of investigation, the US Department of Justice cleared Oracle to acquire Sun in August.

However, Sun did leave its reasoning for the job cuts open-ended. Indeed, the redundancies could very well have as much to do with the jitters of Sun’s customers affecting its business as they wait for final confirmation that the Oracle deal will go ahead as planned.

Sun said it expects to incur charges of between US$75 million and US$125 million relating to its restructuring plan, the majority of which it chalked down to cash severance payments.

The proposed Sun/Oracle deal, which was announced in April, would bring together two major competitors in the market for databases, which is proving a major sticking point for the EU is granting approval for the deal.

Article courtesy of businessandleadership.com

Photo: Sun’s Blade 8000 server.