Sun heads roll as losses spiral

Sun Microsystems has changed the top executives in charge of its core server products - the latest major upheaval as the company seeks to turn around 12 consecutive quarters of revenue decline.

Sun yesterday reported a loss of $760m, or 23 cents per share, on revenue of $2.65bn for the quarter ended 28 March, a loss in line with a Sun warning two weeks ago. The revenue declined five per cent from the $2.79bn garnered in the year-ago quarter, hurt by the transition to products based on the new UltraSparc IV processor, slow sales in Japan and price discounts triggered by fierce competition with IBM, Dell and Hewlett-Packard.

Leaving the company are Neil Knox, executive vice president of lower-end servers, and Mark Tolliver, chief strategy and marketing officer, Sun said Thursday. Clark Masters, executive vice president of the high-end server group, will leave the post but is considering other jobs at Sun, spokeswoman May Petry said.

Two executives will take over the responsibilities of Masters and Knox. Microprocessor chief David Yen, 52, will add to his responsibilities management of the high-end and low-end servers using Sun's UltraSparc processor, while software CTO John Fowler, 43, will add to his job the management of the lower-end server business using "x86" processors from Intel and AMD, Sun said.

The change - the second high-level executive shake-up in two years - comes as Sun is dealing with 3,300 layoffs, the promotion of software chief Jonathan Schwartz to chief operating officer, worse than expected financial results for the first quarter of 2004 and a major new partnership with longtime enemy Microsoft.

Stephen Shankland writes for News.com