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SAN FRANCISCO-Sun Microsystems Inc. said Friday morning it will shed 5,000 to 6,000 jobs from its estimated 33,400-person workforce. The reduction, combined with a partial reorganization of the company, is meant to “align its cost model with the global economic climate” and “accelerate the introduction of compelling open source innovations,” the software company says.

The company’s worldwide real estate portfolio totals 12.8 million square feet of office, laboratory and manufacturing facilities, including 8.8 million square feet of leased space. In early 2006, the company had a 16.2-million-square-foot portfolio, including 8.9 million square feet of leased space. The company’s US portfolio totals 8.2 million square feet, including 5.2 million square feet of leased space. In the Silicon Valley, where the company is headquartered, it owns approximately two million square feet.

In mid-2006, two weeks after GlobeSt.com reported that its 1.4-million-sf campus in Newark, CA, was on the market, Sun Micro revealed it would shed up to 5,000 jobs by the end of the year as part of a plan to curtail four years of declining revenue. A couple of months later BioMed Realty Trust paid $215 million for the campus, which came with excess land for another 400,000 square feet of built space, and recast it as a home for life science tenants.

The sale agreement included a cancellable 18-month leaseback by Sun at $13 per square feet per year, triple net, to allow for the orderly relocation of employees to other Bay Area locations, including its 816,000-square-foot headquarters campus in Santa Clara–now 928,400 square feet–and a one-million-square-foot campus in Menlo Park.

During fiscal 2008, the company entered into a sale-leaseback transaction for its Louisville, CO, facility. At the start of fiscal 2007, in addition to the sale-leaseback with BioMed Realty, the company entered into a sale-leaseback for its Burlington, MA, campus. The total reduction in owned square footage as a result of the three transactions was approximately 3.8 million square feet.

In its annual report, filed with the SEC 90 days ago, the company said it has 2.2 million square feet of owned space that it is not utilizing for its operations. Approximately 1.2 million square feet of the total is vacant and the remainder is subleased to non-Sun businesses.

Substantially all of the company’s facilities are used jointly by its product groups, services groups, global sales and services organization and other functions. Its manufacturing facilities are located in Ponce, Puerto Rico (83,000 square feet); Linlithgow, Scotland (440,000 square feet); and Beaverton, Oregon (square footage not available).

Sun Micro’s share price has struggled since 2000, when it stood in the $60 range. Today, shares trade in the low-to-mid single digits. In afternoon trading Friday, shares stood at $4.17, up $0.10 on the day. One year ago, the company’s share price stood at $21.60.

“Today, we have taken decisive actions to align Sun’s business with global economic realities and accelerate our delivery of key open source platform innovations–from MySQL to Sun’s latest Open Storage offerings,” explains Schwartz in a statement announcing the layoffs and the company restructuring.

The company expects to spend $500 million to $600 million over the next several quarters in cash severance costs. When the reduction is complete, in late 2009, the company says the annual cost savings will range from $700 million to $800 million.

As part of the restructuring, Sun will condense into three units: the systems platforms group (Solaris operating system, the virtualization hypervisors xVM and VirtualBox and various systems management software, and Sun’s server and storage lines); the application platform software group (Java, MySQL, GlassFish, other open source middleware products, and Sun’s learning services training organization); and the cloud computing and developer platforms group (Network.com, the NetBeans developer tools and the StarOffice office automation suite). In addition, its marketing operation will integrated directly into each product group.

“Sun’s new organizational alignment is recognition of the comprehensive role software plays in the company’s growth strategy,” the company says. “Sun creates…platforms on which to develop applications (Application Platform Software),…platforms to run those applications (Systems Platforms) and is taking the next step to enabling infrastructure as a service through ‘cloud platforms’ (Cloud Computing & Developer Platforms).”

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