Joining a rapidly growing list of technology companies reeling from the financial turmoil, Sun Microsystems, which sells server computers, has started a broad restructuring that could see up to 6,000 employees lose their jobs.

Before the stock market opened Friday, Sun disclosed that it would lay off 5,000 to 6,000 workers, or 15 percent to 18 percent of its work force. The company, already dealing with layoffs announced in May, expects to save $700 million to $800 million a year as a result of the moves, while also taking up to $600 million in charges in the next 12 months.
The focus here is to eliminate some of the inefficiencies that have made it hard to do business with Sun,"" said Jonathan Schwartz, chief executive at Sun, adding that a ""new economic reality"" had taken hold in the market. Sun shares were up about 4.6 percent in afternoon trading.
In the last two weeks, several of the technology industry's biggest names have issued dire forecasts.
Last week, Cisco Systems, the largest provider of network equipment, warned that sales in its current quarter could drop 10 percent. Intel, the world's largest producer of chips used in PCs and servers, added to the gloom this week saying its sales for the current quarter could plummet as much as 19 percent as both consumer and corporate customers had pulled back on technology spending.
In addition, other Silicon Valley companies tied to the chip industry, including Applied Materials and National Semiconductor, have started layoffs.
While many of the companies focus on corporate sales, others closer to consumer markets are suffering as well. Qualcomm, which makes chips used in cellphones, said mobile device makers have suddenly cut back on their orders.
Nokia, a large cellphone maker, confirmed as much Friday by lowering its industrywide sales outlook for the fourth quarter and announcing further cost cuts in 2009.
For many companies, the sudden drop in orders started in October and worsened in November.
""Even during the 2000 bust, the decline was more measured,"" said Ashok Kumar, an analyst with Collins Stewart. ""This seems to be going into a freefall.""
Sun's change in strategy follows a period of intense scrutiny for Sun and Schwartz., as the company has fought longer-term problems.
Sun, based in Santa Clara, California, has battled for years to offset a slow, steady decline in its primary high-end server business.
Defending those sales has become more difficult as Sun's customers on Wall Street curtailed their technology spending because of the financial turmoil. Sun is more dependent on Wall Street business than rivals like IBM, Hewlett-Packard and Dell.
""We were certainly the first to enter this,"" Schwartz said, ""and I would like to believe we will be the first to exit it."" Late last month, Sun reported a first-quarter loss of $1.68 billion and a 7 percent year-over-year drop in revenue to $2.99 billion. At the time, Sun cautioned that it would probably restructure to bring costs in line.
(Source: IHT)