IBM Mulling Sun "Resource Action"?

Published on April 3, 2009
by John Paczkowski

sun_ibmjpgNeither Sun nor IBM will confirm that the two companies are even in talks, but the two will reportedly announce their merger on Monday–not today, as previously thought. That’s the word from Bloomberg, which confirms claims that IBM (IBM) intends to pay between $9 and $10 a share for Sun (JAVA). The Wall Street Journal, meanwhile, pegs the price at $9.55 per share, or about $7 billion. At that price, the acquisition will be the largest in IBM’s history, surpassing even its $5 billion purchase of Cognos in 2007.

And after the deal, then what? Massive layoffs, most likely. Analysts say redundancies between the two companies’ businesses could cause IBM to sack as much as a third of Sun’s employees in one of those “resource actions” it’s so fond of. “This deal is definitely going to lead to a lot of combined layoffs,” Forrester Research analyst James Staten told Forbes. “And it wouldn’t be a surprise if most of that bloodletting happened on the Sun side.”

Return to: IBM Mulling Sun "Resource Action"?