SGI cuts another 600 jobs to help reduce costs

Silicon Graphics Inc. (SGI) will cut another 600 jobs worldwide as part of its effort to cut costs and focus on products that show the most potential, the company said Wednesday.

The layoffs bring the total number of cuts at the Mountain View, Calif., high-end computer company this year to 1,000. Total headcount at the company has been reduced by about 25 per cent over a two-quarter period, SGI said in a statement.

Of the new cuts, 460 will be in the U.S. and 140 throughout the rest of the world. After the second round of layoffs, SGI will employ about 3,000 people worldwide, SGI spokesperson Lisa Pistacchio said.

The cuts are across the company, but salespeople and others that deal with customers have been spared somewhat, she said.

By the end of the year the restructuring should save SGI about US$100 million in quarterly operating expenses, the company said. SGI plans to record a US$20 million charge related to the layoffs, it said.

SGI has decided to concentrate more of its research and development efforts on computers used in technical environments that use Linux and Intel Corp.’s Itanium 2 processors, SGI said. Meanwhile, the company said its Altix line of servers and super clusters as well as its visualization and storage products are faring well.

As part of its restructuring, SGI is also moving offices. The company is subleasing its Amphitheatre Technology Center campus in Mountain View to Google Inc. and is moving to another, smaller location.

SGI in July reported a US$36.6 million net loss for the fourth quarter of its 2003 financial year ended June 27. Revenue for the period amounted to US$240 million, the company said.