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Sun Micro to cut up to 5,000 jobs

Sun in addition to cutting the jobs, would sell its campus in Newark, California, and its leased facilities in California.

india Updated: Jun 01, 2006 12:07 IST

Sun Microsystems has said that it will cut 4,000 to 5,000 jobs in the next six months and sell some facilities in a restructuring to save the troubled maker of computer servers up to $590 million a year.

Santa Clara, California-based Sun also said yesterday that its board of directors voted to eliminate its shareholders rights plan, known as a poison pill plan, which makes a takeover plan harder by imposing extra costs.

Sun's shares rose about 1.5 per cent in late trading to a high of 4.70, after closing up eight cents at 4.63 in the regular trading session.

Sun said that in addition to cutting the jobs over the next six months, it would sell its campus in Newark, California, and its leased facilities in Sunnyvale, California.

The job cuts of between 11 and 13 per cent of its workforce will leave Sun with between 32,500 and 33,500 employees.

The cuts come a little more than a month after Jonathan Schwartz took over as chief executive of Sun from Scott McNealy, who remains chairman, to turn the company around as it competes with rivals such as Hewlett-Packard Co.

It will be the first major round of job cuts for Sun since the company shed more than 3,000 jobs when it reached a settlement in its antitrust case with Microsoft in 2004.

Sun said it intends on keeping open its two major Silicon Valley centres in Menlo Park and Santa Clara.