Sun cuts global workforce by 10 percent

By Davey Winder
Wednesday, 21 October 2009 16:40

Open Source

Sun Microsystems has announced that 3000 more jobs must go, and blames the bureaucrats in Brussels.

When Oracle agreed to acquire the company that, in better times, developed the Java programming language and shone brightly as the best of Silicon Valley businesses it looked like things could only get better for the by now struggling Sun.

The USD $7.4 billion deal was thrashed out in April, agreed by Sun Microsystems shareholders in July and the US Department of Justice added its approval in August. So what, exactly, is the $100 million a month problem?

$100 million a month is the amount that, according to Oracle CEO Larry Ellison, Sun is losing while regulatory approval is debated. That's on top of the 31% collapse in revenue for the three months to July. A collapse that, some argue, is partly down to customer caution over the acquisition by Oracle.

Hang on though, didn't I just say that the US Department of Justice had given that approval?

Well yes, but the deal also needs to be approved by the European Commission, and that's where the problems start. It appears that Europe is worried about a potential breach of competition rules if the biggest database company in the world (and third largest software company for good measure) also owns one of the biggest open-source database companies.

And so an antitrust investigation is underway, looking to protect businesses from the possibility of less choice and higher costs. In particular there is concern over the MySQL business, even though Oracle insists there is no conflict of interest. Ellison has stated that he will not be selling off MySQL just to push the deal approval through.

Meanwhile, Sun Microsystems has now announced that a further 3000 jobs, on top of the 6000 losses that were announced a year ago, must go. That works out to 10% of the global workforce, and I understand that the axe is likely to fall globally as well. Jobs are expected to go across all major regions, including Asia, Europe and North America.

The verdict of that EU antitrust investigation is not expected to be known until January 2010.