One word sums up Sun’s fiscal first quarter 2009 results – bad.

On Thursday, Sun reported a loss of $1.68 billion loss on revenues that fell 7.1% year-over-year to $2.99 billion.

The loss included a $1.45 billion non-cash charge for goodwill impairment and a $63 million restructuring charge.

The only silver lining is that the ax could fall on more Sun employees, who have been dragging down this once-fine company. Sun CEO hinted along those lines when he said on the earnings conference call Thursday:

[W]e understand we need to balance our costs in light of the new economic reality. And we’re obviously, going to be paying very careful attention.

Any surprise then that the New York Times is reporting low morale at Sun:

Morale inside Sun, long a favored bastion of top engineers, is sagging, according to current and former employees. The company has endured a number of large layoffs in recent years, although the company still employs about 33,000 people.

What are the odds that Sun will survive beyond 18 months?