Sun ramped up its reorganization plan last night, cutting its headcount by 5,000 and slashing its real estate footprint, although the vendor has yet to reveal what impact this will have on its storage division. (See Sun Issues Growth Plan.)
The move, which is part of a broader cost-cutting initiative, is the latest attempt by new CEO Jonathan Schwartz to leave his mark on the hardware vendor and reverse its recent misfortunes after taking over from Scott McNealy. (See Sun's McNealy Steps Down.)
Speaking on a conference call, Schwartz confirmed that Sun will be cutting its 37,500 global workforce by as many as 5,000 people over the next six months. The vendor is also selling its campus in Newark, Calif. and exiting leased facilities in Sunnyvale, Calif. The moves, according to Schwartz, will result in annual cost savings of somewhere between $480 million and $590 million.
"At the outset, I know that these changes will be tough for many employees," said the CEO, although he stressed that Sun will emerge as a "leaner," more focused company. "The industry is littered with companies that try to be all things to all people, and that's not Sun."
Although he did not go into specifics, Schwartz said that Sun, which stumped up $4.1 billion for StorageTek last year, will be simplifying its product lines and that all products will now be built at Sun. (See Sun to Acquire StorageTek for $4.1B and 2005 Top Ten: M&A.)