Cray Research Inc, which laid off 150 contract staff in September is having to make much bigger cuts this month in an effort to save $50m next year, and, it hopes, substantially increase its competitive strength and profitability in the current global economic climate, and help counteract pressures from flat revenues and reduced profit margins. The supercomputer manufacturer is laying off about 650 regular and contract employees, with about half from Wisconsin and the balance from Minnesota operations and field offices. Cray is also introducing a company-wide wage freeze in 1993; executive officers will forego 1992 bonuses; it will defer or eliminate a number of itscurrent activities; and will consolidate the Rice Lake, Wisconsin manufacturing operations with the Chippewa Falls base. The workforce reduction and other actions will result in a one-time charge of $40m to be taken against the fourth quarter figures, but Cray expects to remain profitable for the year, and sees higher profitability as a result of the measures next year. The company asserts that the cuts will not affect Y-MP entry level, mid-range and C90 products or development of follow-on parallel vector supercomputer systems nor the massively parallel effort or development ofSparc-based superserver products by Cray Research Superservers in Beaverton, Oregon.
