Weakened and under sustained competitive attack from HP and IBM while its acquisition by Oracle goes through an extended regulatory review at the European Commission (EC), Sun Microsystems will slash 3,000 employees during the next 12 months.
Oracle CEO Larry Ellison has said the ongoing delay in the consummation of the acquisition is costing Sun $100 million per month.
According to an SEC filing from Sun today:
Effective October 20, 2009, the Board of Directors of Sun Microsystems, Inc. (the “Company”), in light of the delay in the closing of the acquisition of the Company, approved a plan to better align the Company’s resources with its strategic business objectives, including reducing its workforce across the North America, EMEA, APAC and Emerging Markets regions by up to 3,000 employees over the next 12 months (the “Restructuring Plan”). The Company expects to incur total charges ranging from $75 million to $125 million over the next several quarters in connection with the Restructuring Plan, the majority of which relates to cash severance costs and is expected to be incurred in the second and third quarters of the fiscal year ending June 30, 2010.