San Jose, California-based Silicon Graphics Inc. has announced that it will
cut up to 3,000 jobs and spin off its Cray supercomputer division.
According to SGI, the cuts and reorganization will help it focus on selling
software and computers related to the Internet. SGI bought Cray Research
Inc. in 1996 for $740 million. Since its acquisition by SGI, Cray's
supercomputers have competed with SGI's own powerful systems in a small
market. Earlier this year SGI reorganized and divided Cray off into a
subsidiary. This latest move further breaks Cray into a separate unit.
While announcing no buyers, SGI says it will pursue discussions "with
potential partners to assume the operation of this business." Rick
Belluzzo, SGI's chairman and chief executive, said the company will lay off
between 1,000 to 1,500 employees. Another 1,500 employees will be
reassigned to partnerships or small companies breaking off from SGI. SGI's
business has struggled in recent years against competition by workstation
manufacturers such as Hewlett-Packard Co., IBM, and Sun Microsystems Inc.,
as well as less costly workstations and high-end personal computers using
Intel chips and Microsoft's Windows NT operating software.