Sun seeks buyer for Newark site
Sale would leave tech company with 2 campuses in Bay Area
- Benjamin Pimentel, Chronicle Staff Writer
Friday, May 12, 2006
Sun Microsystems Inc. is selling its Newark campus as part of a major plan to slash costs and consolidate its Bay Area operations.
The computing giant said Thursday that, by mid-2007, Sun will have just two major campuses, one in Santa Clara, where the company's headquarters are located, and the other in Menlo Park.
About 2,000 employees at the Newark facility will be relocated to the two other campuses, the company said.
"After payroll costs, operating and maintaining real estate is Sun's second-largest expense," spokeswoman Stephanie Hess said in an e-mail. "The plan to reduce the size of Sun's real estate portfolio will allow Sun to save in operating costs and contribute to Sun's efforts to achieve sustained profitability."
The company has struggled to be profitable amid stiffening competition with rivals such as IBM Corp., Hewlett-Packard Co. and Dell Inc. Last month, the company reported a $217 million quarterly loss, much larger than the $28 million loss it posted in the same period last year.
Sun's Newark plant was once a major facility where the company made mid-range and high-end servers and data storage products. Two years ago, the company shut down its manufacturing operations there, eliminating 200 jobs and leaving just its sales, marketing and engineering operations.
Employees from the Newark plant will be relocated to the Santa Clara and Menlo Park campuses, Hess said. Some of them will also have the option of taking part in Sun's iWork program, in which employees are able to work from home or from Sun's drop-in offices.
Hess said Sun is now marketing the 1.4 million square feet of office space at the Newark site through Jones Lang LaSalle and Cornish & Carey. The company did not reveal its asking price.
The move comes as Sun begins a new era with the departure of co-founder Scott McNealy as CEO, who was replaced last month by Jonathan Schwartz.
Analyst Crawford Del Prete of International Data Corp. said closing the Newark plant makes sense for Sun. "That's completely in sync with what the company has been telegraphing, that they want to consolidate," he said. "It's not surprising at all. Because of the other footprints they have in the valley, it just made sense." |
