Sun cuts 3,000 jobs in slap at EU
byOct 21st 2009 9:40AM
Several weeks ago, Oracle (ORCL) said that Sun Microsystems (JAVA), which it is in the process of buying, is losing $100 million a month due to EU delays in approving the deal. That is not surprising. Sun is in the very competitive business of selling servers to businesses, and it's nowhere near being the market leader. EU antitrust officials have been dragging out their review of whether parts of the marriage might give the combined operation an unfair advantage in certain tech markets. U.S. officials blessed the deal in August.
Larry Ellison, Oracle's founder and CEO, has stated that he will not lose a lot of money on the purchase, and he's moving to make good on that promise. Sun announced Tuesday it would lay off 3,000 people, and blamed the EU delay for its decision.
It remains to be seen whether the implied threat that even more jobs could be lost at Sun will affect EU regulators. They regularly slap U.S. companies for what they consider bad behavior. Microsoft (MSFT) and Intel (INTC) have both been on the losing end of dust-ups with the EU.
Ellison is a tough man, maybe the toughest in Silicon Valley. He wants to make sure that his $5.6 billion investment in the server company pays off. The layoffs at Sun may not be over.
Douglas A. McIntyre is an editor at 24/7 Wall St.