Sun will lose between 1,500 and 2,500 jobs after suffering losses in Q3.
The vendor recorded a net loss of $34 million in Q3 2008, compared with a net profit of $67 million during the same period last year.
The firm blamed the current credit crunch in the US economy as the chief reason for the loss and subsequent job cuts.
"The US economy presented Sun with significant challenges in the third quarter, masking our progress in developing nations and economies across the world,” said Sun chief executive Jonathan Schwartz. “With double digit year-over-year growth in India and Brazil and triple digit billings year-over-year growth in our energy efficient, Solaris-based Chip Multi-Threading systems, Sun made considerable progress during the quarter.
“We continue to invest in the future created by open alternatives to proprietary technologies, best exemplified by the acquisition of MySQL. The world is moving to open source innovation and Sun continues to lead that revolution."