IBM-Sun Merger Could Mean Vast Job Cuts

Rumors began circulating last month about IBM and Sun Microsystems merger, and such a deal seems eminent  pending exact terms and price. However, not everyone is seeing a deal between the companies as a good thing. Because there is significant overlap in the companies’ businesses, a merger could be thousands of layoffs, mostly of Sun Microsystems employees.

According to reports, IBM could lay off up to a third of Sun’s employees, putting more than 10,000 people out of work. Some IBM jobs may also be at risk, and Sun employees may be retained and IBM workers are laid off as redundancies. Peter Falvey, a Revolution Partners mergers and acquisitions banker says that IBM is likely to hand-pick only the very best Sun salespeople and fire the rest en mass.

In addition, Sun employees may be laid off because IBM will stop development on some projects. Some Sun divisions, like MySQL, are probably fairly safe, but others will certainly face the chopping block, since IBM doesn’t really plan to go in certain directions.

IBM has already laid off a number of their own employees, cutting more than 10,000 job since the beginning of the year and outsourcing many jobs to overseas contractors. With a Sun merger, we can only expect more lay offs on the horizon.