Recession hits tech sector; Sun cuts jobs by 18%

NBC News
Recession continues spread and now hits technology sector. Sun Microsystem Inc. (JAVA), A company which becomes a leader in Java and Open source technologies, announced today that the company to lays off between 5,000-6,000 its employee or a roughly between 15-18%.

The contagion effect of the mortgage meltdown already hits all sectors. Technology sector which was considered as one of the recession proof sectors, actually not excluded from the current crisis. However even technology industries is known as cash rich companies and involved less in credit market cycle but they depend on IT customer spending which is affected by credit market. A major investment bank failed in US has spread across into Europe and beyond. Of course, it also impacts into global demand of IT products. In October 13, Gartner cut its forecast of global IT spending in 2009 to growth of just 2.3%.

In the last time crisis when technology bubble burst, the company resisted to that crisis. To support their hardware product marketing, Sun services their customers by providing open source software and developer platform.

Additionally to the jobs cut, Sun is creating new business groups for its software organization. The new groups include Application Platform Software, System Platform and Cloud Computing & Developer Platform. Efforts for products and technology will be conducted by the individual groups. This restructuring plan is aimed to reduce the company overhead in annual cost by as much as $800 million.

According to CEO Jonathan Schwartz , Sun will continue to invest in areas such as cloud innovation, open source and true data centers because these areas are more profitable.

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Related Posts :

Spending in IT to slowdown; Microsoft to offer 0% Financing

Sources :

FT.com: Sun Microsystems to cut up to 18% of workforce, November 14, 2008 21:43
Reuters: Sun Microsystems to cut up to 6,000 jobs, November 14, 2008 10:50am EST
Visual Studio Magazine: Sun To Cut More Than 15 Percent of Global Workforce, November 14, 2008
NBC News: Sun Microsystem layoffs, November 14, 2008 01:42 am EST

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