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Sun to Shut U.S. Operations for a Week in Bid to Cut Costs

Thomas Lepri

In a striking effort to reduce costs in the face of slowing sales, Sun Microsystems (SUNW Quote) is shutting down all of its U.S. operations for an entire week, the company confirmed Wednesday.

Sun has previously communicated the plan to its employees in an internal memo. The shutdown will take place the first week of July, thus including the already planned holiday July 4. Sun's operations outside the U.S. will "be doing something similar," a spokesperson said.

Last week Sun reported fiscal third-quarter sales 20% below the prior quarter's level. Earnings, meanwhile, were hit even harder, falling 50% from the second quarter. Accordingly, on the company's earnings conference call, Chief Financial Officer Mike Lehman had indicated that Sun was taking measures to reduce operating expenses.

Nearly every computer hardware company is trying to rein in costs as they try to weather the current slowdown. Compaq (CPQ Quote) on Monday expanded the number of planned firings from 5,000 to 7,000. Last week, Hewlett-Packard (HWP Quote) said that it was forcing employees to take six unpaid days off as a measure to reduce costs. H-P had already relocated its spring analyst meeting from Manhattan to Palo Alto, Calif., where the company is headquartered.