Tech Sector Gets Another Blow As Sun Plans To Slash Up To 6,000 Jobs

Santa Clara, CA (AHN) - Sun Microsystems, Inc. (NASDAQ: JAVA) reported Friday it may have to cut down as many as 6,000 employees across the world to streamline operations.

"Today, we have taken decisive actions to align Sun's business with global economic realities and accelerate our delivery of key open source platform innovations - from MySQL to Sun's latest Open Storage offerings," Jonathan Schwartz, CEO of Sun Microsystems, said.

The technology sector has suffered the most following the losses incurred by the financial industry from the subprime mortgage crisis and slumping credit market condition. The tech sector mainly depends on business and consumer spending, which has weakened over the last 12 months.

The job cuts of around 5,000 to 6,000 employees represent approximately 15 percent to 18 percent of the Santa Clara, California-based company's total work force of 33,000 employees over the next year.

Sun's Board has approved a restructuring plan aimed at reducing costs by almost $700 million to $800 million at an annual rate.

The company expects to incur total charges in the range of $500 to $600 million over the next 12 months, of which it expects to record up to $450 million within its current fiscal year 2009.

Shares of the company that sells server computers were rising by 17 cents or 4.18 percent to $4.24 in afternoon trading on NASDAQ market. The stock of the company has lost a market value of 77 percent so far this year through yesterday.

The company has traded as high as $21.60 and as low as $3.50 in the last 52-week period, and has a market cap of $3.15 billion with average volume of 16.02 million. Sun has traded at $257.25 in September 2000, according to Bloomberg News.