Latest Round Of Sun Layoffs Hits Channel

Solution providers said that Sun on Friday sent pink slips to a large number of middle managers, and on Monday let go many of its sales and channel staff.

Layoffs were first reported late last year, but the pace seems to have picked up, channel sources said.

"It's bad, and it's widespread," said Hope Hayes, president of Alliance Technology Group, a Hanover, Md.-based solution provider and Sun partner. "It looks like half the sales force is gone, half the engineers are gone and some of the channel people."

Many of Sun's managers were let go on Friday, including many who have worked with Alliance for years, Hayes said. "We're going, like, 'Oh my God, this is crazy,' " she said.

Mark Teter, CTO at Advanced Systems Group, a Denver-based solution provider and Sun partner, said his company is getting e-mails from many of Sun's employees, especially from salespeople.

"There's some midmanagement people gone, but a lot of the layoffs are feet on the street," Teter said. "I'm concerned. I don't know the total impact of the layoffs."

Teter said among the casualties of the latest round of layoffs is the local Sun systems engineer who works with ASG, as well as a few local Sun sales reps.

At this point, Teter said, it's hard to judge the impact of the layoffs on the channel.

This is especially so in the face of rumors that IBM may be looking to acquire Sun.

"It's confusing," he said. "We work very closely with Sun's sales force, and any time there's a massive layoff, it's going to impact the channel in a negative way. And with the looming acquisition [of Sun by IBM], it's even more unclear. And there's been no clear message from Sun to the channel."

In an e-mailed statement to Channelweb.com, Sun referred to its decision last November to reduce its global workforce by between 5,000 to 6,000 employees, or about 15 percent to 18 percent of its workforce, and that in January it sent layoff notifications to about 1,300 employees as part of that action.

"This week, Sun can confirm that notifications are being given to approximately 1,500 as part of this effort," according to the statement. "Reductions are being made across all levels, including vice presidents and directors. Sun remains committed to its strategy with a consistent focus on providing innovations that enable customers to address their business needs. We continue to see great opportunities for our technologies globally and are focused on our customers and partners. We will continue to provide updates on our progress against the workforce reduction plan as they become available."

Shawn Dainas, a Sun spokesperson, said that the layoffs are on a global basis, but that most are happening in North America.

Dainas also said that the layoffs are not concentrated in any particular part of Sun, such as the channel or direct sales organizations.

Instead, he said, they are a continuation of the layoffs announced in November, as well as part of Sun's move to reorganize in order to accelerate its open-source development. That move included the combination of Solaris and the systems teams, the creation of a new business unit with software and virtualization, and the development of a new cloud computing group.

The layoffs are not related to rumors that IBM is planning to acquire Sun, Dainas said. He also said he could not comment further on such rumors.

For Hayes, the layoffs actually represent an opportunity to grow her company.

Alliance has hired several people in the last couple of weeks, including a few former Sun employees, and is actively looking for more, Hayes said.

"Please send your resume to [email protected]," she said. "If someone wants to go channel, we have a great thing going on. Come on over. If you are a real good sales rep, we have a fun place for you to go. But if you sit next to a fax machine, sorry, we don't have one."