Sun announces job cuts, Intel expected to follow


— 12:27 AM on June 1, 2006

News.com reports that Sun is preparing to cut between 11 and 13% of its work force. 4,000 to 5,000 of Sun's 37,500 employees will be let go within the next six months, with most layoffs due to occur throughout June. Sun expects the lower headcount to save it between $480 and $590 million by the fourth fiscal quarter of 2007. This announcement comes just over one month after Scott McNealy stepped down as Sun's CEO, leaving his position to former president and COO Jonathan Schwartz. News.com says Schwartz and CFO Mike Lehman began "extensive reviews" of Sun's operations around the time Schwartz was promoted, and that Lehman plans to enforce a "leaner and more efficient business model."

In related news, TG Daily says word is circulating around Silicon Valley that Intel is planning to cut 16,000 jobs. Last month, Intel announced major structural changes that it said would contribute to making the company "more efficient" after many months of poor financial results. Intel's NOR flash group was streamlined earlier this month as part of the spring cleaning initiative, but no layoffs have been announced thus far. An Intel spokeswoman quizzed by TG Daily did not deny the rumors, but said Intel is "in the midst of the most comprehensive review of its business structure" and that it plans to become "more nimble."

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