"We have not seen any improvement in the IT spending environment," said chief financial officer and executive vice-president Stephen McGowan. "In fact, some would say it might actually be worsening." McGowan admitted.
Customers have pulled back on large projects that would have included sales of its high-end servers. Such cutbacks have punished Sun over the past year and a half.
It returned to profitability in its fourth quarter, which ended in June, after posting losses before charges in three previous consecutive periods. A first-quarter loss would reverse the recent momentum.
Sun expects to have cut its workforce by 1,000 by the end of the year, with some of those reductions occurring this quarter, McGowan said.