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Tech Watch | InfoWorld Staff » Sun's Schwartz swings the axe

May 31, 2006 | Comments: (0)

Sun's Schwartz swings the axe

Poor Sun. The quality of its products is widely recognized. Solaris is a great OS. Java is an undisputed success. The new Niagara processor is generating a lot of buzz, and Sun's AMD-based x86 servers are top notch. Despite all this, however, the question that remains on everyone's mind is whether Sun will be able to capitalize on all this great R&D. Just how, exactly, does it plan to reverse its financial misfortunes of the last few years?

We may now have one part of the answer. IDG News Service reports that Sun plans to lay off some 5,000 employees, amounting to as much as 13 percent of its workforce. In addition, it will sell three of its U.S. campus facilities.

Sun's board has already approved the moves, as well as new operational goals, including modest revenue growth. But what do you think? Is tightening its belt what it will take to pull Sun out of its slump?

Posted by Neil McAllister on May 31, 2006 02:50 PM


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SUN needs to explain what's getting axed and what's staying...clearly. We've all been through downsizing. The infighting, lack of cooperation, product "harvesting", negative attitudes can quickly destroy a company.

Sun must be having deeper problems. The cat's out of the bag now.

Posted by: George at May 31, 2006 06:36 PM

I think they are right on the money. If they have to cut costs, there is nothing better than letting people go.

Now, it will undermine their potential in the future, so the outlook in the long run is "sell, sell, sell".

I wouldn't like to see Java die with Sun. Sun is a hardware company and it gets no benefit from Java. They should let JavaSoft run the show with Java, so that Sun can concentrate on hardware.

The separation would both be good for Java and for Sun.

Posted by: BIngo BOngo at June 1, 2006 03:36 AM

I think that the top mgmt of a company - any company - that has to chop people should improve their revenue stream immediately by eliminating all perks and profits from the mgmt benefits - no stock options, no golden parachutes, no company benefits except maybe health ins. Also, for every layoff, their salaries should take at least a 50% hit, since their salaries and goodies are a _huge_ expense to the company. Many of those top level desk jockies do not earn their goodies - their staff earns it for them - mostly.

Posted by: Sue at June 1, 2006 11:29 AM


There is NO margin in hardware and I would advise SUN to take a good long look at what IBM have done.
Professional Services is the way forward.

Posted by: mike at June 2, 2006 04:32 AM

I think we all saw the job cuts coming. Also, it seems Jonathan Schwartz is more in touch with the market and doesn't have the ego of his predecessor. Sun will be great once again.

Posted by: Felix Castro at June 2, 2006 06:24 AM

Sun or rather Schwartz is not inventing any new wheels here. They just playing catch on IBM's success story: services. It is not clear if this team can execute as well as IBM can, but it is already clear that this cast of corporate characters is as unoriginal as the one it replaced. Perhaps they will execute someone else game better then the author, but how often that happened in business? Their moves are immature as ponytails on a 40ish man. I would love to know how firing 13% of workforce contributes to the long term success of the company. Was Sun that bloated after "dot in dot com" burst?

Posted by: oldgeek at June 2, 2006 11:16 AM

I think they still need to cut more people. They currently still have ALOT more staff than they had prior to the dot-com explosion. They tried to grow too fast... Most (not all) of the technical folks that they put on-site are really good compared to anyone IBM sends out (never could find a good technical IBM guy).

Posted by: merlin at June 2, 2006 12:09 PM

Frankly, I'm very surprised Sun is still around and not bought by someone else. I worked there at Sun in Newark when Scott was shooting off his big mouth my paper stock options went from 90 bucks to 4 bucks...btw- I let'em keep it and schocked by trying to imagine what the weekly Wednesday doughnut bill and catered food for endless meetings were for thousands of employees...had to be in the thousands of dollars a month...I still have friends left there too so my heart goes out to them as they come into work on Mondays- the day reserved for the axe, wondering if it's there turn.

Posted by: John North at June 2, 2006 12:43 PM

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