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Sun confirms 1,500 job cuts this week

Move not related to rumoured IBM acquisition

Sun Microsystems is laying off about 1,500 employees in a follow-up to a restructuring plan announced a few months ago.

The cuts include a portion of Sun's customer-facing staff, including direct sales and professional services employees, according to a research note from Wedge Partners, a financial analyst. Such a move would make Sun more reliant on channel partners to sell its products.

Wedge Partners said the cuts may affect 25 percent to 50 percent of Sun's customer-facing staff. Sun said the actual proportion is significantly lower, although it wouldn't provide an exact figure.

Sun announced in November that it planned to lay off 15 percent to 18 percent of its workforce, or up to 6,000 employees, in an effort to reduce costs by $700m to $800 million annually.

In January it confirmed that it had laid off 1,300 workers as part of that plan, and the cuts this week appear to be a continuation of the same effort, said Ryan Hunter, an analyst with Wedge Partners.

Sun said the layoffs affect staff at all levels, including vice presidents and directors.

These latest cuts would have been planned before any acquisition talks with IBM got under way, said Dan Olds, principal analyst at Gabriel Consulting, who also heard that Sun sales staff are among those affected.

Sun is reportedly in talks to be acquired by IBM, though neither company has confirmed any discussions. IBM is said to be examining Sun's contracts and other documents to see if a deal makes sense.


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