Partners: Sun Job Cuts A Good Start

Sun Microsystems said on Wednesday that it is planning steep cuts in headcount and costs in order to return to profitability, leaving its channel partners wondering why the vendor hadn't done that long before.

The Santa Clara, Calif.-based company plans to cut between 4,000 and 5,000 employees over the next six months, sell one of its campuses, get out of unneeded leases, and rationalize R&D and other expenses in an effort to attain its goal of having an operating income of at least 4 percent of revenue during the fourth quarter of its 2007 fiscal year, followed by 10 percent for fiscal year 2008.

Cutting 4,000 to 5,000 people, selling unneeded real estate, and getting out of leases is a nice beginning, said Tom Kuni, president of SSI hubcity, a Metuchen, N.J.-based Sun solution provider who has been calling for the company to return to profitability for years, including a recent two-year stint as co-president of Sun's VAR Council.

"But why is Sun taking six months to do something that should be done immediately?" Kuni said. "Four-thousand to 5,000 is only half of what is needed."

That six-month time table will be a huge distraction at Sun as employees wonder who will be affected and as they start interviewing for new jobs, Kuni said. "They should make the cuts now, and cut more than they need to," he said. "Cut once, cut deep, and not death by 1,000 cuts. This announcement shows Sun still is not making the quick and decisive decisions it needs to."