Sun Microsystems said Wednesday that it will eliminate up to 5,000 of its 37,500 employees over the next six months, but did not give details of where the cuts will occur.
The Santa Clara, Calif.-based network computing company, which has 4,700 workers in Colorado, has struggled to trim operating expenses and stem five years of losses.
Sun’s Colorado workforce includes more than 2,000 workers absorbed by last June’s $4.1 billion acquisition of Louisville- based Storage Technology Corp.
Sun chief executive Jonathan Schwartz said during a conference call with analysts that he did not know which divisions or geographic regions would bear the brunt of the cuts. The goal is to achieve between $480 million and $590 million in annual cost savings.
“For the most part, everything is under examination. We’re focused on costs rather than how we try to achieve that,” Schwartz said. “I know these changes will be tough for employees, but we are very confident we are making the right choices.”
The job cuts – 4,000 to 5,000 workers – represent cutbacks of 11 percent to 13 percent of the company’s global workforce.
“As five thousand people rush into the job market at the same time it’s going to be tough,” said a Sun employee on the Broomfield campus Wednesday afternoon who did not want to be identified.
He said company officials gave employees few details about the impending cuts.
“I don’t think there will be any doubt in our minds that Colorado will feel some of that pinch,” said Tom Clark, director of economic development for the Denver Metro Chamber of Commerce. “Cuts of that magnitude are not confined to just one area.”
At the same time, Clark said there’s a “significant probability” that Sun’s investment in StorageTek could bode well for employees here.
“With all that talent in Colorado it would be unlikely that Colorado would face a closedown of any of the facilities,” he said.
But Sun’s presence in the local technology community has been waning, a sign that “they really had to focus on keeping the company going and profitable,” said Su Hawk, president of the Colorado Software and Internet Association.
“Unfortunately they have pulled back in terms of active participation; they’re not visible at our events or events we’ve attended,” she said.
News of more technology job cuts come to Colorado a little more than week after Longmont-based disk-drive maker Maxtor Corp. said it would cut 650 jobs as it is acquired by Seagate Technology.
Hawk said the job losses are a big hit to Colorado, a state that doesn’t have many large high- tech companies.
“The good news is that the smaller to medium-sized businesses are doing great and continuing to grow,” she said. “But their growth is one to five people, compared to cuts of 600 at Maxtor.”
Sun is aiming to reverse operating losses and make operating income of “at least” 4 percent of revenue by the end of fiscal 2007 and 10 percent in the long term.
The company said it would shift its research and development efforts, decreasing “non- core R&D” and focus on its Java and Solaris platforms, as well as leveraging products from its StorageTek division. Storage products accounted for 18 percent of the company’s sales.
The company also said it will exit leased facilities in Sunnyvale, Calif., and keep operating at its two main campuses in Menlo Park and Santa Clara, Calif.
Shares of Sun closed up 8 cents at $4.63 Wednesday.
Denver Post staff writer Andy Vuong and Bloomberg News contributed to this report.
Staff writer Kimberly S. Johnson can be reached at 303-820-1088 or kjohnson@denverpost.com.
