Sun To Cut Australian Jobs

Month Date, 2006: 5,000 Employees to go as Sun follows its StorageTek realignment with investor-friendly staff 'downsizing'.

Senior managers at Sun in Australia were uncontactable today - all of them apparently sitting in a planning meeting in Gordon. However, reports both at home and in the United States claim that up to 13% of its workforce will lose jobs over the next six months - with the 5k figure settled at due to some hiring of new staff. Sun currently employees 755 people in Australia.

The company's stated strategy of attaining operating income of four per cent of revenue by Q4 of 2007 is the goal for this rationalisation, which also includes selling off its Newark (California) campus, and withdrawing from a longterm lease in Sunnyvale, also in the western state.

This the second round of layoffs since 2004 when 3,000 staff were shown the door following the settlement of an anti-trust case with Microsoft. This time the organisation expects to have to write-down up to US$500-million this quarter to cover costs with an expectation of a US$590-million saving over the year. With a fifth consecutive year fiscally negative year approaching - Sun is also removing its 'poison pill' shareholder entitlement, which historically, has made the company a difficult target for take-over.

This action is seen streamlining an organisation that has been suffering in recent years and which has recently appointed a new President and CEO - Jonathan Schwartz - and a new CFO, Michael Lehman.

Schwartz was ambiguous as to where the personnel culling would occur when he presented to industry analysts in the U.S.A. saying only that they would be, "Across the board".

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