Sun to cut 9pc of workforce; fate of Irish workers unclear


2 Apr 2004

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Sun Microsystems is to cut 3,300 jobs, or 9pc of its global workforce, following an earnings warning. A spokesperson for the company’s European Software Development Centre in East Point Dublin, where it employs over 200 people, said it was too early to say the impact what job cuts will have on its Irish workforce.

“The company has announced a 9pc reduction in its global workforce. At this time it is too early to tell what impact this will have in Ireland,” she told siliconrepublic.com.

For its fiscal third quarter, which ends Sunday, Sun expects revenue of US$2.65bn and a net loss of US$710m to US$810m, or 23 cents to 25 cents a share. The loss includes charges of about US$350m for an increase in the valuation allowance for deferred tax assets and about US$200m to restructure its workforce and real estate.

Excluding the charges, the company would have had losses of between US$200m to US$260m.

The decision to cut its workforce was made bittersweet by the news that Sun has signed a new legal and technical cooperation pact with longtime foe Microsoft that will net the company some US$1.95bn. Both companies have agreed to settle all outstanding litigation.

Sun’s CEO and chairman Scott McNealy (pictured) commented: “We are resizing the company to better align our cost structure. Network computing solutions that solve our customers complex computing problems remains our focus. Continued execution of our strategies will pay off in revenue generation over the long-run. We are well positioned with the strongest product portfolio in years, a substantial cash and market position, strong channels and partners, and a growing pipeline of customers who are demanding more Sun products and solutions.”

By John Kennedy