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Sun plans job cuts
Staff slash follows profit jump

By Dawn Kawamoto

Published: Wednesday 08 August 2007

Sun will cut its workforce in the second half of the year as part of a restructuring plan, according to a regulatory filing the company made on Tuesday.

The server giant expects to incur charges of $100m to $150m over the next several quarters, largely as a result of the job cuts. That move comes after Sun posted a fiscal fourth-quarter profit on 30 July, marking its third consecutive quarter of profitability after a string of losses.

Sun's board of directors approved the job cuts last week as part of a plan to "better align the company's resources with its strategic business objectives", according to the Tuesday filing with the Securities and Exchange Commission.

A Sun representative did not immediately have an estimate of the number of jobs that will be cut.

When the company announced profitability in its fiscal third quarter, it warned that revenue was softer than had been expected.

But in the company's latest quarter, which ended in June, Sun matched Wall Street expectations on the revenue front and handily beat earnings expectations.

Two days after Sun reported its fourth-quarter results, however, Sun's board approved the job cuts. It's not immediately clear whether any new information came to light during those two days that may have prompted the board to approve the job cuts in order to meet the newly set expectations.

Sun currently has 34,219 employees, according to a company representative.

Dawn Kawamoto writes for CNET News.com