IBM Mulling Sun “Resource Action”?
by John Paczkowski
Posted on April 3, 2009 at 8:58 AM PT
Neither Sun nor IBM will confirm that the two companies are even in talks, but the two will reportedly announce their merger on Monday–not today, as previously thought. That’s the word from Bloomberg, which confirms claims that IBM (IBM) intends to pay between $9 and $10 a share for Sun (JAVA). The Wall Street Journal, meanwhile, pegs the price at $9.55 per share, or about $7 billion. At that price, the acquisition will be the largest in IBM’s history, surpassing even its $5 billion purchase of Cognos in 2007.
And after the deal, then what? Massive layoffs, most likely. Analysts say redundancies between the two companies’ businesses could cause IBM to sack as much as a third of Sun’s employees in one of those “resource actions” it’s so fond of. “This deal is definitely going to lead to a lot of combined layoffs,” Forrester Research analyst James Staten told Forbes. “And it wouldn’t be a surprise if most of that bloodletting happened on the Sun side.”
Comments
Sad to say, but Sun is bloated with massive extra useless bench warmers.
They coulda and shoulda dumped over 50% of their employees from the high of 44,000 back in 2000. They should only be 22,000 today, but instead have over 30,000 after the Nov 08 RIF.
The R&D org has been bloated and worthless for over a decade. SG&A will also take a huge hit. Execs, VPs, Directors and Middle Mgrs will all have to go, since they got Sun to this pathetic state that they are in.
Sad to face reality, but the alternative is to continue their death spiral and follow DEC and Wang into the graveyard.
Posted by Hank Scooter at April 3rd, 2009 at 11:42 amNonsense, I’m afraid. Sun’s R&D department always did, and still does produce some of the most innovative technology in Silicon Valley… in recent years, dtrace, zfs, amber road, thumper, blackbox, the list goes on.
The culprits are Sun’s appalling sales and marketing teams, who’ve consistently failed miserably to capitalize.
Posted by Benny Carlson at April 3rd, 2009 at 2:19 pm