Sun Lays Off 200 From High-End Server Group - InformationWeek
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4/10/2006
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Sun Lays Off 200 From High-End Server Group

The layoffs represent about a 7% staff reduction for the scalable systems group, the division that produces products based on Sun's high-end Sparc CPU.

Sun Microsystems confirmed Monday that it has laid off 200 people from its high-end server group.

The layoffs represent about a 7 percent staff reduction for the scalable systems group, the division that produces products based on Sun's high-end Sparc CPU.

Sun offered little guidance about why it cut jobs in that division, other than releasing a statement that said the Santa Clara, Calif., company is working to "maintain a cost structure that provides consistent and profitable growth."

"Sun's overall strategy remains the same, and our product road map is as strong as it has ever been, with no significant changes," the statement said. "We will continue to maintain our focus on Sparc processor and system innovation with binary compatibility. We will also continue to expand the current Sparc hardware and software developer communities through activities like OpenSparc."

Though shipments of volume servers have been up, higher-end servers appear to be on the decline, according to a recent report from Gartner. The research firm in February said that in North America, x86-based servers increased about 10 percent in unit shipments and revenue from 2004 to 2005, and the RISC/Itanium market fell 6.8 percent in shipments and 1.8 percent in revenue in the same time period.

The drop in high-end server sales was due in part to replacements in the low end with Linux-based systems and typical refresh cycles, Gartner said. The highest-end systems were the most constrained, with 16-way servers being particularly impacted, according to the research firm.

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