Sun Forced to Slash and Burn
SANTA CLARA, Calif. (
--
Sun Microsystems
(JAVA)
has announced plans to
as the tech giant awaits
of its
acquisition by
Oracle
(ORCL) - Get Oracle Corporation Report
.
The deal has already been
by Sun shareholders and the
DoJ
, but has been delayed while European regulators scrutinize the merger's antitrust implications. Officials are mainly concerned about
getting its hands on Sun's MySQL database and thus limiting the choice for database software.
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Oracle had originally intended to close the deal sometime during the summer, but Brussels had other ideas. The European Commission is expected to make a decision on whether to approve the merger by Nov. 19, according to
Reuters
.
Sun revealed the headcount reduction in a filing with the
Securities and Exchange Commission
Tuesday, explaining that its hand was forced by the delay in closing the deal. The firm will now cut 3,000 employees over the next 12 months, incurring charges between $75 million and $125 million. Most of the charges will be incurred in the second and third quarters of fiscal 2010, it added.
Oracle CEO
has already
that the European Commission's probe is costing Sun $100 million a month, and the deal faces
from pressure groups on both sides of the Atlantic.
With rivals
Hewlett-Packard
(HPQ) - Get HP Inc. (HPQ) Report
and
IBM
(IBM) - Get International Business Machines (IBM) Report
keen to exploit any uncertainty and lure Sun customers onto their own technology, Oracle wants to get the deal done as quickly as possible
Sun is no stranger to restructuring efforts and attempted to streamline its business long before Oracle's bid. Last November, for example, the troubled computer maker announced plans to cut up to 6,000 jobs, or 18% of its global workforce, as the firm attempted to breathe life back into its struggling business.
The company's stock was flat in extended trading Tuesday.
-- Reported by James Rogers in New York