Sun Microsystems begins laying off 6,000 today [confirmed]

January 22, 2009 | Eric Eldon | Comments | |

Updated with this response from the company:

On November 14, 2008, Sun announced a series of changes designed to align its cost model with the global economy and accelerate the introduction of compelling open source innovations. As part of that effort Sun announced a global workforce reduction of approximately 5,000 to 6,000 employees, representing approximately 15% to 18% of the Company’s global workforce. Sun can confirm that today layoff notifications were given to approximately 1,300 employees as part of that action. Reductions were made across all levels, including vice presidents and directors.

Sun 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.

Last November, Sun Microsystems said it would be laying off up to 6,000 employees — or around 18 percent of its workforce — after a weak first quarter performance. The cuts are happening today, we’re hearing from a well-placed source, ahead of the company’s second-quarter earnings report next Tuesday.

The server and software company is facing hard times as the market has shifted from closed-source to open-source software technologies, like Linux, and it is facing stiff competition from larger rivals like IBM and HP. To boot, a significant portion of the company’s business is in the financial sector — clients that aren’t in a position to make large purchases these days. Sun has been experimenting with software-as-a-service and other models to help it gain market share, and most prominently purchased open-source database company for MySQL for $1 billion last year. Here’s some more from the strategy announcement it released in November:

As part of this effort, Sun is announcing a global workforce reduction and alignment of its Software organization into new business groups – Application Platform Software, Systems Platforms, and Cloud Computing & Developer Platforms – with a focus on boosting open source momentum and growing new sectors of the market who view technology as a competitive weapon.

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About the Author, Eric Eldon

Eric currently covers digital media technology and business news, especially what's happening on social networks and their platforms. He also writes and edits stories about venture capital, and lots of other stuff, too. He started at VentureBeat in the spring of 2007, half a year or so after Matt Marshall left his reporting job at the San Jose Mercury News to found the site. Eric previously cofounded a startup called Writewith, that was building editorial software for newspapers and other groups of writers. The startup didn't work out, but he learned a lot.

  • BeeCee
    Your well-placed source is somewhat misinformed, only some locations were affected today.
  • Perhaps you missed my update?
  • Jeeves
    it's true, I'm a Sun employee and today we started hearing from People sending Farewells
  • prozacula
    well, that's what happens when you charge 4X as much $ for hardware that can be replaced with commodity parts running free software.

    good luck "selling" Java for profit, Sun.
  • John Smith
    Sun is great and they doing a nice job. I am sure they will suceed in this global crisis.
  • linh
    prozacula, is right! sun is ridiculously sold Sun hardware at an expensive price!!! Only those people that bought those machines are old admins that way to secure their jobs from the new wave of younger Linux admins. Too bad they are getting old and losing jobs as well. So no more new purchase to Sun's fancy expensive servers. how can you make money from Opensource that you can already downloaded for free? MySQL is an excellent product, but there is no way I would pay for it because is already FREE.
  • linh.... As for "how can you make money off open source?" - Services... Hardware... Support... And not everything Sun is Open Source, anyway...

    linh + prozacula...
    As for Sun's "expensive" servers... depends on what servers you look at... Enterprise kit is expensive... thats not a "Sun" thing so much as a high end server thing, as it is from IBM and HP... but enterprise class servers can't really be compared, apples to apples with x86 kit, its not the same, and even if they were done in high volume, they still would not be as cheap as x86 kit, its a different world... and in addition to that, less volume usually means higher prices in just about every industry...

    If you did want to compare apples to apples, Sun's x86/x64 servers are very competitively priced as compared to HP, Dell, IBM... and they're packing more cores into smaller form factors than the other big players, and also more disks in many of the servers in their line up.

    Sun have also done some really neat things in chassis design to keep things cool... and there's a bunch of software innovations now bundled with hardware you won't find anywhere else... I'd check the prices on x86/x64 kit and compare to others, its actually not bad.

    But back on topic, I'm not sure "thats what you get, Sun!" is a very productive kind of commentary. Lots of people are losing their jobs from Sun, and other companies effected by this downturn, and that's going to be a killer for a lot of people and their families.

    At any rate, I believe we can probably agree, whether you like or dislike Sun, that this is a real sad thing for so many people to be suddenly out of work, and that position is not something you would wish upon just about anyone.


    PS. We're not all "old admins"... Sun actually has some really cool stuff, there's stuff in Solaris you won't find in Linux, Windows, or any other OS. Check it out, you may find yourself pleasantly surprised.
  • Peter Antypas
    I disagree. You can compare x86 and SPARC systems in a dollars/MIPS ratio and Intel/Linux is a clear winner. I can build a distributed transaction processing application on cheap commodity hardware with enough redundancy and failover capacity to get 4 nines of availability, for less than the cost of two high-end SPARC T2 based servers.

    And as for Sun's X64 servers, who cares? The moment they abandon SPARC they're just another commodity hardware provider with nothing that can seriously differentiate them from the likes of SuperMicro.

    Although Solaris may in fact have "cool stuff" that you can't find in Linux or Windows, that "cool stuff" is largely IRRELEVANT to most potential customers, and that's Sun's core strategic failure: They overimproved and bloated their product offerings to move upmarket, while the disruptor (Intel & Linux) kept moving up, up, up until they finally tossed them out of their penthouse.

    x64 won. SPARC lost. That's the bottom line.
  • OracleDBA
    @ Peter:
    It isn't a win / lose comparison for the processors. They're targeted at different applications for different markets. SPARC was the workhorse of the financial industry analysts who need security and availability to manage large data sets using high performance computing systems with large amounts of contiguous memory. They targeted SPARC to those who would not want, for one reason or another, to resort to distributed processing across clusters using using lock management and synchronization to achieve the same thing. SPARC was targeted at high performance for numerical calculation often used by financial "what if" comparisons, data cube analysis, and pivot tables. x86 was general purpose from the start for everything from desktop publishing to spreadsheets to games.
    Fujuitsu had an interest and took over fabrication for Sun's SPARC design. SPARC has been the workhorse for the financial industry and many are no longer in business or not spending money with anyone for reasons completely beyond their use of Solaris SPARC.

    Comparing web programming to application client-server programs for the financial industry does not provide an "apples to apples" comparison either. Geoff O pointed that out about the chipsets, but did not elaborate on how differently targeted the applications were for the processor + OS combination.

    Yes, you sure can. You can run ten times the amount of hardware and even achieve your holy grail of "99.999", five 9's. But I know for a fact that clusters require MORE administration and maintenance work, as do you. And you can pay your sky high power bill every month so you can stay warm while you and your buddies huddle around your low priced Linux heaters.

    Once summer comes don't miss the chance to get out and reconnect with humanity to regain your compassion. This article was about people and how the downturn has taken a toll on the performance of Sun as observed by the thousands of people, with families and friends, that were affected by layoffs in a tough job market. No matter what OS and processor you put on your resume.
  • @Peter... We'll have to agree to disagree... OracleDBA clarifies the point I was making quite well (this isn't all about maximum performance).

    ZFS, Dtrace, SMF, Role Based Access Control and so on are all fairly relevant technologies and solving real customer problems. This doesn't have to be a battle of winners and losers, Linux has some great stuff that I'd love to see in Solaris, especially in the area of driver support.

    At any rate... Sun bashing here doesn't change the fact that people are losing their job, and thats terrible... lets leave it at that.
  • Harold Cain
    IBM is laying off 5000, Dell and HP have announced cuts as well. When 18% of the gnp disappears companies either have to adjust down 18% or die. Hopefully the recession is over soon and gnp climbs again. That is the only long range cure.