Sun trims headcount in Asia

By Stephen Shankland and Nawaz Marican, CNET.com
Wednesday, October 31, 2001 04:58 PM
SINGAPORE--Sun Microsystems began a massive layoff Tuesday, a process that will cut about 3,900 jobs worldwide, including Asia.

Earlier this month, the Palo Alto, California-based server maker said it would lay off 9 percent of its work force, following weaker technology spending in the wake of the September 11 attacks.

The process, which is affecting all divisions across the world, "should be complete within the next few days," US-based spokeswoman Diane Carlini said Tuesday.

When contacted, a Singapore-based spokesperson confirmed that while Asia South was affected, the impact was not as extensive. Sun's Asia South operations include Singapore, Malaysia, Thailand, the Phillipines, Indonesia, India, Sri Lanka, Bangladesh and Vietnam.

According to the spokesperson, Sun served pink slips to "about 3 percent of its 1,000-odd" employees in the region. The company declined to reveal specific numbers.

As part of its cost-cutting measures in Singapore, Sun's e-commerce arm iPlanet is moving into the former's premises in the island's central business district, she noted.

However, the company is not consolidating its premises and facilities in other parts of Asia South, she added.

Sun held out against layoffs longer than most high-tech companies battered by the ongoing spending slump. Even when company executives decided layoffs were necessary, they tried to shield research activities from the cuts.

The Nasdaq-listed company faces several challenges besides the sour economy. In its core market, Unix servers, IBM is resurgent and Hewlett-Packard is fighting back.

Some analysts, such as Sanford Bernstein's Toni Sacconaghi, have expected deeper cuts at the Palo Alto, California-based company.

In its most recent quarter, Sun reported a loss of US$180 million on revenue of US$2.86 billion worldwide. That's a precipitous plunge from the same quarter the year earlier, when revenue from Internet sales and telecommunications customers was much higher. The company then had net income of US$510 million on revenue of US$5.05 billion.

On Tuesday, Sun shares slipped US$0.32 to US$9.54 on the American bourse.


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