Sun cull continues as 4,400 more staff are shown the door

Downsizing its way to profitability...
Written by Stephen Shankland, Contributor

Downsizing its way to profitability...

Sun Microsystems announced on Thursday that it will cut 4,400 employees in a move to get the company back to profitability by the first half of 2003. The server maker reported a first-quarter net loss of $111m, or four cents per share, on revenue of $2.7bn. In the year ago quarter, the company reported a net loss of $180m, or six cents per share, on revenue of $2.9bn. Including a $31m loss on investments, a $24m charge for previous restructuring activities and a $22m gain from tax effects, Sun reported a loss of $78m, or two cents per share. Analysts expected the company to report a loss of four cents, according to First Call. Revenue for the quarter fell under the company's and Wall Street's expectations. Revenue in the US dropped seven per cent, while revenue from Japan fell 13 per cent. CFO Steve McGowan said Sun plans to cut about 11 per cent of its work force, reducing the number of employees from 39,400 to about 35,000. The figure includes 1,000 cuts announced six months ago, but doesn't include further cuts that will affect contract and temporary workers, he said during a conference call Thursday. Thursday's layoffs are in addition to a 3,900-person reduction announced a year ago. Stephen Shankland writes for News.com
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