The whisperers were right. Scott McNealy, who co-founded Sun Microsystems and served as its CEO for 22 years, is stepping down. The news came shortly after yet another announcement of bad quarterly numbers.
No one is surprised, as the San Francisco Chronicle's Alan Saracevic predicted would be likely on Sunday. Sun has been floundering for years. McNealy is a great guy for a sound bite and a swashbuckling keynote speaker, but there's only so long that you can preside over red ink at a public company.
Let's not shed a tear for him, though; he is no doubt set up for life. Let's save our sympathy for those about to experience the real pain -- Sun's workers. According to Saracevic, Wall Street has been pressuring Sun to institute significant layoffs for years: "One analyst has been quoted saying he wants between 10,000 and 12,000 job cuts, which would represent nearly a third of Sun's 39,000 global workers."
Who was resisting Wall Street? Saracevic says McNealy was holding the line against layoffs. According to the Wall Street Journal, he was under fire for refusing to "cut costs." So he had to go, and now the blood will flow.
We don't want to put McNealy on the pedestal as some kind of workingman's hero. As far as American I.T. workers are concerned, he talks the same talk as most other captains of high-tech industry. He's on record as supporting both outsourcing and the lifting of limitations on high-skilled immigrants. But we'll line up alongside Saracevic at least partway. It's a shame that someone who resisted the easy way out -- shedding workers to improve the bottom line -- has to take a fall.
A shame but, again, hardly a surprise. Because making workers pay for economic growth is the name of the global economy game. Which leads to the last irony. No company benefited more from the explosive growth of the Internet in the 1990s than Sun, which reveled in the insatiable demand for its high-end computer servers. The company's longtime motto, after all, was "The network is the computer."
The worldwide spread of that network has been one of the basic propulsive forces of modern globalization, with its consequent intensification of competition everywhere. Sun can no longer compete in a world with low-cost hardware and open-source alternatives to its proprietary operating systems and high-end computers. Sun helped make the world that is killing it.
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