Sun Microsystems to cut more jobs

SAN FRANCISCO -- Sun Microsystems Inc., the computer company that has fired 3,700 employees since May 2006, will spend $100 million to $150 million to eliminate more jobs.

Sun, the fourth-biggest maker of server computers, will trim as many as 2,000 positions, J.P. Morgan Securities analyst William Shope said in a research note. A spokeswoman said Sun hasn't determined how many job cuts are coming.

Shope's estimate would equal about 6 percent of Santa Clara, Calif.-based Sun's workforce. Chief executive Jonathan Schwartz, who replaced cofounder Scott McNealy last year, led Sun to its first annual profit in six years after improving profit margins through job cuts.

"While we are encouraged by today's announcement, we await signs of more aggressive actions," said Shope.

Most of the costs are for severance pay and will be recorded from July to December, Sun reported.

The shares have tumbled 92 percent from their peak in 2000, the height of the technology bubble. The company lost customers as its rivals offered cheaper products.

Schwartz has updated storage devices and servers to win back buyers.

Schwartz aims to increase the company's operating profit margin to 10 percent in the fiscal year ending in June 2009. The company recorded an operating margin of 8.5 percent in its latest fiscal year and forecast an 8 percent margin for the current period.

On July 30 Sun said fourth-quarter net income was $329 million, compared with a year-earlier loss in the period ended June 30.