Sun Microsystems Inc. has chosen four of its facilities around the world to take the place of its Silicon Valley office as the research and development hub, the U.S. computer hardware and software maker said on Friday.
The four research and development centers are in the Indian city of Bangalore, the Chinese capital of Beijing, Russia's St. Petersburg and the Czech Republic capital, Prague.
"We are over-invested in high-cost geographies like the U.S., and underinvested in low-cost geographies like India," Stephen Pelletier, the company's senior vice president of global engineering, told reporters in Bangalore.
Pelletier said the company will not lay off programmers in the U.S. — but won't hire many, either.
"We are not pulling out," he said. "We are going to have a big presence in the Silicon Valley for a long time."
But the ability to quickly hire a large number of programmers in India and other low-cost locations justified the company's plan to consolidate its worldwide research staff in those places, he said.
The company has reduced its staff to about 30,000, from roughly 43,000 four years ago. However, it has cash reserves of $7.5 billion — enough for expansion.
Sun Microsystems, headquartered in Santa Clara, Calif., employs nearly 1,000 software engineers at its Bangalore center — a number that will double in two years, Pelletier said.
The other three centers will see similar growth in employee numbers, Pelletier said, without giving details.
Scores of multinational firms outsource software programming, engineering design and routine office functions to countries such as India, where skilled workers are plentiful and wages low.
Sun Microsystems, which thrived through the 1990s Internet boom, has fallen on tough times in recent years. It has sought ways to control rising costs, particularly in research and development.