Sun Microsystems reports loss, 2,500 job cuts

Sun Microsystems, which was a high-flyer during the dot-com boom, has announced plans to axe between 1,500 and 2,500 jobs.

The job cuts represent up to 7.5% of the group’s total workforce of 33,500. It was not revealed where the jobs will be cut, but it is believed the majority will be in the US.

The computer company, which is based in Santa Clara, California, reported an unexpected three-month net loss of $34 million (£17 million) compared with a profit of $67 million in the same period of 2007.

It blamed costs relating to its takeover of the Swedish software firm MySQL in addition to disappointing orders from US customers.

The decline in orders was the sharpest from the US government, retailers and telecoms firms.

Chief executive, Jonathan Schwartz, said he was disappointed and added that the third quarter was a challenging one in which US macroeconomic factors impacted overall progress.

However, despite the credit and housing crunch that is having a severe impact on financial institutions, Mr Schwartz said the financial services sector actually came in ahead of the company’s internal projections, indicating that banks and other financial institutions appear to be using technology to drive down costs elsewhere.

Shares in Sun fell 15% in after-hours trading on the Nasdaq stock exchange.

As well as having a manufacturing facility in Hillsboro, Oregon, the company also has facilities in Linlithgow, Scotland.

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