Sun cuts 4,000 staff as losses worsen

The network computer maker Sun Microsystems announced yesterday it is slashing almost 4,000 jobs in an effort to cut costs as it admitted trading conditions had become more uncertain since the US terrorist attacks.

The move came as Sun warned it expected revenues in the first quarter ended 30 September to be between $2.7bn (£1.8bn) and $2.9bn (£2bn), beneath analysts' estimates of around $3.3bn. It also expected to record a loss of 5 cents to 7 cents a share in the period, worse than the expected 4 cent-a-share loss.

Sun is now aiming for a profit by the fourth quarter of its financial year, said Mike Lehman, the chief financial officer. "Our business nearly ground to a halt in the two weeks after that tragic day," he said.

Scott McNealy, chairman and chief executive, said: "Things were tough with the economy before, but now we are facing increasing uncertainties both in the US and globally."

The job losses, equating to around 9 per cent of Sun's workforce, as well as a move to consolidate certain facilities, will force the company to take a $500m (£340m) charge in the second quarter of the year.

Separately, the US computer chip maker Advanced Micro Devices said third-quarter sales tumbled a greater-than-expected 22 per cent and blamed the drop on a price war with Intel. AMD said sales for the quarter ended 30 September were about $766m (£517m), down from second-quarter sales of $985.3m. It also said it expected to report a net loss of $90m to $110m.