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Silicon Graphics to reorganize and cut jobs

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

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