In a sign of bad news for Sun, Reuters is reporting that they have announced they will cut 3,000 jobs or about 10% of their workforce over the next 12 months in attempt to cut their losses. The cuts will be taking place across the globe.
Why are they cutting so many jobs? They are blaming it on the European anti-trust regulators. According to Larry Ellison, Sun is losing around $100 million a month because of uncertainty caused by the in-dept investigation from European anti-trust regulators into their deal with Oracle. Sun claims that their competitors, IBM and HP are taking advantage of the situation and poaching Sun’s customers.
The job cuts are expected to save them between $75 million to $125 million over the next few quarters, this coming after they cut between 5,000 and 6,000 jobs last year.
Sun clearly has major problems and it feels like they are trying to come up with any excuse they can as to why they are having problems but the fault is their own. If you have a company that has a product that satisfies their customers and makes them happy, there would be no reason for them to switch to a competitor just because of a little uncertainty, or at least not until there was a solid indicator as to how the situation would turn out. If you provide a great product and great service, a true customer would stick with you.
Sun has had problems for a long time anyway, posting a $2.2 billion loss last year alone. If Sun hopes to stop the bleeding of both money and employees, they need to focus on their product and how to make it so much better than their competition, nobody in their right mind would make the jump to a competing product. This will certainly require some consolidation and maybe even cutting loose of some products like MySQL, but their needs to be a core focus and that will reap great rewards. Sun needs to refocus if it hopes to remain relevant before they are purchased by Oracle and if they want to bring any value to Oracle when the deal finally goes through.