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Sun Microsystems in deep financial trouble: Analysts
Silicon Valley, Oct 04: Sun Microsystems, the world`s leading maker of computer network servers, is in deep financial trouble and needs to lay off thousands of employees and refocus its operations, according to some Wall Street analysts.
Silicon Valley, Oct 04: Sun Microsystems, the world's leading maker of computer network servers, is in deep financial trouble and needs to lay off thousands of employees and refocus its operations, according to some Wall Street analysts.
If it doesn't, the Silicon Valley company is likely to fade away and join the ranks of other technology companies such as SGI and Netscape Communications, warn analysts, including Merrill Lynch analyst Steve Milunovich.
In an open letter to Sun yesterday, Milunovich wrote, "The company has gone from being pure in vision and predictable in financial performance to an underachieving, bloated, unfocused reflection of its former self."
He said that Sun needs to cut up to 7,000 more workers, drop out of some businesses and give the famously combative CEO Scott McNealy "a makeover". Otherwise, Milunovich predicted, Sun's ultimate value will only be its customer list for another tech company that buys it, a leading US daily reported. However, dismissing such talk as "ridiculous", the company's chief technology officer said Wall Street hasn't grasped that Sun has radically changed its strategy: It's re-engineering the whole way computer systems are put together to simplify the operation of increasingly complex and costly corporate data centers.
Andrew Neff, an analyst at Bear Stearns, also said that Sun needs to do something drastic. "It needs to create a massive sense of urgency to address critical challenges," he said. Sun says it has already cut back. Twice, Sun has laid off thousands of employees and the company has 36,100 workers today, compared with 43,000 in 2001. Bureau Report
If it doesn't, the Silicon Valley company is likely to fade away and join the ranks of other technology companies such as SGI and Netscape Communications, warn analysts, including Merrill Lynch analyst Steve Milunovich.
In an open letter to Sun yesterday, Milunovich wrote, "The company has gone from being pure in vision and predictable in financial performance to an underachieving, bloated, unfocused reflection of its former self."
He said that Sun needs to cut up to 7,000 more workers, drop out of some businesses and give the famously combative CEO Scott McNealy "a makeover". Otherwise, Milunovich predicted, Sun's ultimate value will only be its customer list for another tech company that buys it, a leading US daily reported. However, dismissing such talk as "ridiculous", the company's chief technology officer said Wall Street hasn't grasped that Sun has radically changed its strategy: It's re-engineering the whole way computer systems are put together to simplify the operation of increasingly complex and costly corporate data centers.
Andrew Neff, an analyst at Bear Stearns, also said that Sun needs to do something drastic. "It needs to create a massive sense of urgency to address critical challenges," he said. Sun says it has already cut back. Twice, Sun has laid off thousands of employees and the company has 36,100 workers today, compared with 43,000 in 2001. Bureau Report