Sun cuts 3,000 jobs in slap at EU
Filed under: Company News, Oracle, Sun Microsystems
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.
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Reader Comments (Page 1 of 1)
10-21-2009 @ 10:13AM
JB said...
Don't be fooled by Oracle. In my opinion Oracle always intended to fire a lot of Sun employees. The European Commission's delay gives them an excuse to blame someone else for the layoffs. With this new round of layoffs, Sun has laid off 9,000 employees in less than a year in addition to tens of thousands more in the past few years. Sun customers should be very nervous about this extreme loss of resources. Who's left to support their investment on Sun technology? Oracle employees? What do they know about hardware? Scary.
Reply
10-21-2009 @ 2:27PM
ij70 said...
You probably have a point. However, I wish to point out that maintaining something is a lot less intensive when compared to research and development of new system/product. I think the customers will not even notice the change.