EC Delay Means 3000 Job Cuts Says Sun

Beleaguered Sun Microsystems revealed on 20 Oct. that it must trim about 3,000 jobs over the next 12 months, due largely to the delay in closing its planned merger with Oracle, which is currently under review by the European Commission.

The EC, which monitors commercial competition in the 27 countries that comprise the European Union, started due diligence on the deal in August and has said it expects to have a decision by 19 Nov on whether to approve the deal.

Meanwhile, Oracle founder and CEO Larry Ellison has said Sun is losing about $100 million per month as the two companies wait for the EC to make its decision.

In an 8-K filing with the U.S. Securities and Exchange Commission, Sun reported that its board approved a new plan “to better align the company’s resources with its strategic business objectives,” which includes laying off 3,000 workers during the next year.

The company also said in the filing it would need to incur charges amounting to between $75 million (£45m) and $125 million over the next several quarters to maintain its restructuring plan.

In November 2008, Sun announced that it planned to reduce its global work force by 5,000 to 6,000 employees—or 15 to 18 percent—in 2009. Many of those jobs were vacated by attrition, a Sun source told eWEEK at the time.

Sun, based in Santa Clara, Calif., currently has about 29,000 full-time employees. Despite its respected products and intellectual property, the company has been plagued with red ink for most of the last decade.