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Channel Partners: Sun Needs Layoffs, Cost-Cutting

Just increasing revenue won't be enough for incoming CEO Jonathan Schwartz to return the company to profitability, Channel Partners says.

All “Sun-setting-on-McNealy” jokes aside, Sun Microsystems partners took Scott McNealy’s move to step aside as CEO in stride.

But they remain concerned, in the wake of comments last week by new CEO Jonathan Schwartz, that the company is not going to get back to fighting trim.

On a conference call last Monday, Schwartz said Sun will aggressively seek opportunities with the best upside, including open-source Solaris. He did not commit to substantial cost-cutting. Sun employs 38,000 people and reported a $217 million loss for its third fiscal quarter ended March 31, including $144 million in acquisition and stock compensation charges.

“This is about how to grow. It is not about how to take a whack in head count,” Schwartz said of his plan.

Partners said Sun has to do both.

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