Sun Microsystems (NASDAQ:SUNW) announced today that it plans to let go a number of additional employees over the next year, in addition to the 3,700 cut loose earlier, and will take an additional $100-150 million hit for severance packages over the next several quarters. In the past year, under new CEO Jonathan Schwartz, the company has returned to profitability, albeit primarily via cost containment. BloggingStocks' Eric Buscemi recently pointed out the company's modest revenue growth in relation to improving margins.The news comes on the heels of Sun's unveiling of the new UltraSPARC T2, which it describes as the world's fastest commodity microprocessor, a product it hopes will help reinvigorate company growth. The UltraSPARC will be sold separately, rather than as a part of Sun assemblages.
I'm guessing the timing of the announcement was planned to send a message to the market that force reduction would not come at the expense of R&D. The market remains wary, however, as SUNW stock continues to trade well below its six-month high.
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Reader Comments (Page 1 of 1)
8-08-2007 @ 1:59PM
Chris said...
I received a buy-out from Sun in 2002. After only 6 years of (dedicated) service, I received a very nice package that enabled me to vacation for a few years. I am still a large holder of Sun stock; however my average buy price on the employee purchase plan is about $22.00; so back to work for now.