Sun Microsystems to slash workforce

Sun Microsystems has revealed plans to cut its headcount yesterday, despite last week postings positive quarterly financial results.

The vendor did not specify how many of its 35,000-strong workforce would be affected in a filing Tuesday with the US Securities and Exchange Commission (SEC), but pointed to an estimated $100 million to $150 million (£49.5 million to £74.2 million) in severance package payments and other costs it will make by the middle of next year.

The company has made no additional, specific comment on the SEC filing.

But on 30 July, Sun's most recent quarterly financial results revealed a turnaround in its fortunes, posting a $329 million (£162.7 million) profit in comparison to the $301 million (£148.9 million) loss it posted for the same period last year.

Since then the company has been involved in a restructuring programme to cut costs and streamline its business operations. However, in the following results conference call last week, Sun chief executive Jonathan Schwartz said the results were a result of the programme's success, while hinting at further cuts to come.

At the time, he said the cuts would be accompanied by an increased focus on research and development investment.

"With a solid strategy and consistent execution, we delivered on our commitment to achieve at least four per cent operating margin in the fourth quarter. This milestone marks significant progress toward our longer term growth plan of at least 10 per cent operating margin for the full fiscal year 2009," said Schwartz.

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