Sun lays off 300 staff

Server maker Sun Microsystems is closing a factory in Newark, California and moving its product manufacturing duties to a plant in Hillsboro, Oregon, in a move that will require job cuts.

Sun said on Thursday it will lay off about 300 people from the Newark site over a six-month transition period as a result of the manufacturing change, spokeswoman Debbie Walery said.

Affected employees were notified of the change on Thursday, Walery said.

Sun, under intense pressure by IBM, Dell and Hewlett-Packard, has been working for years to cut expenses as part of its plan to return to profitability.

The Hillsboro site, with 250 employees, previously manufactured just high-end servers such as Sun's E15K StarCat. With the change, it will build more of those systems and take on midrange server and storage system production, Walery said.

In addition, Hillsboro personnel will take on Sun's 'customer-ready' programme to assemble hardware and software to customer specifications, she said.

It's not all bad news for Sun though. Sun on Thursday reported a narrower-than-expected second-quarter loss, as the company seeks to improve its operations.

Sun reported revenue of $2.9bn for the period ending 28 December, slightly down from $2.91bn from a year ago. That beat analysts' revenue expectations of $2.7bn, according to First Call.

The computer maker also posted a $125m net loss, or 4 cents a share, compared with a loss of $2.3bn, or 72 cents a share, a year ago. Wall Street analysts had been expecting the company to report a loss of 5 cents a share, according to First Call.

Stephen Shankland and Dawn Kawamoto

Stephen Shankland and Dawn Kawamoto write for CNET News.com