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Sun Lays Off 5,000-6,000; Head of Software Quits
The additional layoffs are supposed to cut costs by $700 million-$800 million a year

In an effort to head off its disappearance below the horizon, Sun is going to lay off 5,000-6,000 people, 15%-18% of its workforce, and restructure its software business, never a great money maker. Among the first to go is the head of software Rich Green (pictured). Sun said he has chosen to leave the company.

The restructuring is supposed bring Sun's costs more in line with economic reality.

In the September quarter it lost a staggering $1.67 billion. Revenues were down 7% and sales of its high-end Sparc systems fell 15%, facts it blamed on the downturn and its exposure to Wall Street.

It did not blame its own failure to size properly and light on a consistent, viable strategy after the dot.com disaster. It's been one of the walking wounded since then.

The additional layoffs, which have been rumored for several weeks, are supposed to cut costs by $700 million-$800 million a year.

It will mean charges of $500 million-$600 million over the next 12 months. Sun expects to take $375 million-$450 million of those charges between now and the end of its fiscal year in June.

The restructuring of its software business is supposed to "accelerate the introduction of compelling open source innovations."

Try as it might the benefits of open source have alluded Sun. After years of resistance it came too late to the party but now insists it will be a "growth strategy."

Its software operations are being organized into two new business groups and a new group within Sun's existing systems business - Application Platform Software, Systems Platforms, and Cloud Computing & Developer Platforms.

Anil Gadre, Sun's chief marketing officer, is giving up that job to run the new Application Platform Software group, which is supposed to "capitalize on the global market's demand for open application platforms for everything from databases to business integration services on servers, desktops and handheld devices."

It will include the Java franchise, MySQL and software infrastructure such as the GlassFish application server and identity management products.

John Fowler, who's been running systems and storage, will now run Systems Platforms, which includes Solaris, virtualization and systems management software as well as hardware.

And then there's Cloud Computing & Developer Platforms under senior VP Dave Douglas, who is supposed to lead the company's efforts to capitalize on the shift in customer and developer focus to web-based cloud services.

He gets the NetBeans developer platform and the StarOffice portfolio.

Douglas is supposed to build on Sun's existing online developer community and grow revenues.

Product and technology marketing will be integrated directly into the product groups with field and partner marketing moving under Peter Ryan, executive vice president of global sales and services.

Corporate marketing will be led by senior VP, Ingrid Van Den Hoogen, who also joins Sun's Executive Leadership Team, reporting to the CEO.

 

About Maureen O'Gara
Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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