14 DAY TRIAL // Sun is going from bad to worse as it waits for the acquisition go-ahead from the European Union's competition regulators. The company has been losing customers and the potential revenue for months now and it's only getting worse, leading to it having to lay off some 3,000 employees, roughly 10 percent of its workforce. The company is keeping quiet about the move but it has revealed the plans in a regulatory filing with the US Securities and Exchange Commission.
The job cuts will be spread out over the next months and will affect most of Sun's units. The new cuts come about a year after Sun announced it would lay off about 6,000 of its then 33,400-strong workforce. It hasn't disclosed how many of those have been accomplished so far but the company had 29,000 employees on June 30, 2009. Many fear that after the Oracle acquisition goes through there will be further cuts, as the corporation is known for slashing the headcount at most of the companies it has bought in order to get profits up.
Oracle announced its intention to buy Sun Microsystems for $7.4 billion in April but the deal is far from going through yet. The deal was approved by the US Department of Justice following a prolonged investigation under antitrust concerns but the European Commission's regulators have extended their inquiry for several months, especially concerned about the fate of the MySQL database system, which competes with Oracle's own offerings on some accounts.
MySQL's creator has actually asked Oracle to let go of the database technology and sell it off to an impartial third party to get the approval process going. Meanwhile Oracle claims that the delay is costing Sun $100 million per month in lost revenue with the latter's hardware unit being the hardest hit. It's clear that at this rate Sun will only get into bigger trouble but that may very well work out in Oracle's favor in the long run.