San Francisco - Citing a "new economic reality," Sun MicroSystems said Friday that it would restructure and shed up to 6,000 jobs or 18 per cent of its worldwide staff.

The maker of high powered server computers has been struggling for years as its enterprise clients switch to cheaper alternatives based on Microsoft Windows and open-source Linux systems.

But the troubles in the financial sector which constituted the most important part of Sun's customer base forced the company to take the drastic action. In a statement Sun chief executive Jonathan Schwartz said the restructuring and layoffs would save the company between 700 million dollars to 800 million dollars per year, while incurring charges of up to 600 million per year in the next 12 months.

The Santa Clara, California-based company, is cutting back to cope with the "global economic realities," Chief Executive Officer Jonathan Schwartz said. Sun last month posted its second loss in three quarters and said its financial-services customers were curbing orders until they have more liquidity.

Sun is the third major Silicon Valley company announce job cuts this week after Applied Materials Inc., the largest maker of chip-production machinery, announced plans to cut 1,800 jobs, and mobile-phone chip builder National Semiconductor Corp. said it will shed about 5 percent of the staff.

"We're taking sharp, decisive action to align ourselves to a new economic reality, and also to amplify our investment in the way the world is heading," Schwartz said in a statement. He declined to specify where the cuts would take place but did say that the company would shift resources towards fast growing regions from areas where the economy was contracting.

Sun said its sales fell 11 per cent to 1.76 billion dollars in the last quarter, with sales to banking and investment firms in the US dropping 20 per cent. The company currently employs some 33,000 people and trails IBM, Hewlett-Packard and Dell in server sales with an 11.8 per cent market share. (dpa)