Sun to cut 3,000 jobs as Oracle waits for takeover approval

Sun Microsystems will lay off an additional 3,000 workers over the next 12 months as it waits for Oracle’s acquisition of the company to get approval from European regulators.

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Sun Microsystems will lay off an additional 3,000 workers over the next 12 months as it waits for Oracle’s acquisition of the company to get approval from European regulators.

Sun is losing $100 million a month and in a filing with US regulators the company said it was making the cuts "in light of the delay in closing the acquisition".

Sun already announced plans last November to axe between 5,000 and 6,000 jobs and yesterday’s redundancies, some 10 percent of Sun's workforce, are in addition to the earlier reductions.

Neither Sun or Oracle would say whether the job cuts would have taken place anyway, if the takeover had already gone ahead. However, Tony Sacconaghi, a technology analyst with Sanford C. Bernstein & Co, predicted that Oracle may cut up to 10,000 jobs once the deal is complete.

Sun will take a charge of $75 million to $125 million for the job cuts, mostly for cash severance payments, it said. It expects to incur most of the charges in the second and third quarters of its fiscal year, which means the current calendar quarter and the first three months next year.

The US Department of Justice approved Oracle's $7.4 billion acquisition of Sun in August, but the European Commission has launched an investigation that could last until January. The regulators say they are concerned about the effect that Oracle's ownership of Sun's MySQL database will have on the open-source software market.


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