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Blaming Brussels

October 21, 2009

IT giant Sun Microsystems says the European Commission's slow approach to approving its takeover by Oracle have forced it to lay off up to 3,000 workers - or 10 percent of its workforce.

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Sun is laying off 3,000 workers as European regulators stall a merger with OracleImage: AP

Sun, the world's fourth largest maker of computer servers, outlined the layoff plans Tuesday in a US regulatory filing. The company, once a dot-com star, is banking on a 4.9-billion-euro (US$7.4-billion) deal with database giant Oracle, announced in April, to rescue it after a decade of financial struggles.

"In light of the delay in the closing of the acquisition of the company," Sun said its board of directors had approved the job cuts, "to better align the company's resources with its strategic business objectives."

The layoffs will be spread across all of the geographical regions Sun operates in, the filing said.

Rivals exploiting European delay

The US government signed off on the deal in August, but European antitrust regulators have yet to give their approval. The European Commission is worried about competition concerns in the database software market, where Germany's SAP is one of Oracle's main competitors.

The delay has forced Sun to fend for itself while rivals such as IBM and Hewlett-Packard have exploited the uncertainty surrounding the deal to poach customers. Oracle CEO Larry Ellison recently said that Sun is losing about $100 million a month as a result.

The European Commission is expected to announce its decision on the deal by November 19th, according to dpa news agency .

bn/AP/AFP/dpa
Editor: Sam Edmonds