The Sunnyvale Sun

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Sun layoffs could hurt broader perception of the city's health

By JASON GOLDMAN-HALL

In the next six months, as Sun Microsystems cuts up to 13 percent of its workforce to cut costs, the direct impact on Sunnyvale will be minimal, city officials say, but some worry it could be a symptom of a bigger problem.

Sun Microsystems is pulling out of its Newark and Sunnyvale operations, primarily consolidating operations into its large Santa Clara campus.

"I don't think we'll see much of an impact. I think most of the impact will be in the perception people could get about Sunnyvale," said Suzi Blackman, Chamber of Commerce president and CEO.

Because Sunnyvale has made its name as a home for large companies such as Yahoo!, Lockheed-Martin and Network Appliances, major economic changes, such as corporate downsizing, can have significant impact on the local economy.

Blackman said that because Sun had a small operation in Sunnyvale, it shouldn't be hard for the economy to weather. But if other companies face similar problems, the city would feel the loss more.

"I'm hoping that this is not a sign of the times, of what's happening to mega-companies," Blackman said. "Some of the largest companies in the world are in Sunnyvale. You look at that and think 'Wow, what does that mean for us down the road?' "

Large companies leaving would hurt Sunnyvale on a number of levels. When businesses close and employees leave, stores do not generate as much sales tax revenue, and business travelers do not fill local hotels and motels.

Blackman said one of the most significant affects of a corporate exodus would be felt by the small businesses in Sunnyvale: locally owned printing shops, maintenance companies and other service providers that flourished by serving large companies during the dot-com boom.

Sunnyvale communications officer John Pilger said Sun's action was disappointing because there was nothing the city could do.

"We're always sorry to see a business leave Sunnyvale, because as the 'Heart of Silicon Valley,' we take pride in our ability to support our high-tech businesses," Pilger said

Sunnyvale has tried to streamline its permit process and work with developers to encourage and retain local businesses.

"No matter how good our service to someone is, when a company is going through a restructuring as large as theirs, its not something we can change," Pilger said.