If one quickly skims through Sun Microsystem’s newspeak-style press release, its devastating cut to 6,000 jobs, globally, only sounds like a doubleplusungood minor reshuffle. Newsoutlets and investors, however, weren’t fooled, and the announcement caused the troubled company’s shares to plummet to $4.06. At its height, during the dot-com boom, Sun’s shares were worth $250.
For eight years, Sun has been in deep financial troubles, and it hasn’t escaped the global credit crisis—a significant number of its customers are banks. This latest shakeup in has some analysts speculating that Sun will become a “dirt cheap“ acquisition target for larger rivals, such as HP, IBM, or Dell.
While this move is expected to save Sun between $700 million and $800 million annually, it won’t be enough to preserve the company. Sun may still undergo further restructuring, including splitting its software division into three different business units to push its open source business.