Sun Microsystems Shifting Jobs as Part of Cost-Cutting : Technology: No work force reductions are involved. Employees may take a voluntary severance package or be retrained and relocated.


Sun Microsystems, the highflying computer workstation vendor that has avoided the woes afflicting most of the computer industry, said Tuesday that it has been shifting jobs away from its Milpitas factory for the past eight months as part of a cost-containment program.

A spokeswoman at the Mountain View-based company declined to say how many employees would be affected, but published reports indicated that 750 to 1,000 of the 2,700 jobs in Milpitas, near San Jose, would be eliminated.

Sun spokeswoman Cindee Mock emphasized that no overall work force reductions were involved and that employees were being given the option of a voluntary severance package or retraining and relocation to other Sun facilities.

The move comes at a time when major Silicon Valley employers including Apple, Hewlett-Packard, Seagate and International Business Machines are cutting their work forces in response to a severe computer industry downturn.


The unemployment rate in Santa Clara County, which includes most of Silicon Valley, jumped to 6.3% in June, up from 5.7% in May and far above the 3.9% rate registered for June, 1990, according to figures released Friday by the California Employment Development Department.

Philip Kohlenberg, the EDD’s labor market analyst for Santa Clara County, said the June figures do not include the cutbacks at Apple or some of the other recent layoffs. He noted that until recently, computer industry employment had looked fairly strong in comparison to the semiconductor sector, which has been losing jobs steadily during the past several years.

Like many other areas of California, Silicon Valley has become much less attractive as a manufacturing location in recent years because of high real estate prices, traffic congestion and water shortages. Santa Clara County has lost 10,800 jobs during the past year, including 7,600 in manufacturing, according to EDD.

Mock of Sun said the company had no intention of moving manufacturing from the Bay Area entirely and attributed the cutbacks in Milpitas to increased outsourcing of components and a desire to “globalize” the company’s operations.


Sun, which gains more than 50% of its revenue from overseas, is looking for a manufacturing site in Asia. The company, which employs 12,233 people worldwide and about 7,300 in the Bay Area, also has factories in Massachusetts and in Scotland.