Of the 700 staff Silicon Graphics Inc is jettisoning as part of its restructuring, most are coming from the Cray Research group. Around 350 jobs are expected to go in this half of the company’s fiscal 1999, the others in the second half. The Cray business which does not appear to have much of a future under new SGI CEO Rick Belluzzo as the market for massive proprietary systems recedes. No wonder former Cray chief Bo Ewald slung his hook. Reviewing the company’s recent fourth quarter, Wall Street brokerage Merrill Lynch & Co observes that if sales of SGI’s Origin servers rose 40% year-over-year its means revenue from sales of Cray supercomputers must have sunk 80%. Graphics workstations slumped 44%. The O2 and Octane suffered from poor price-performance; Octane prices were recently cut by up to 36% to keep sales propped up until the new graphics subsystem [and MIPS R14000 chip] is available in January, it said. US sales were off 31% – but up 25% sequentially. European business shrank 33% and Asia was off 46%. The quarter’s $205m charge includes $90m for severance costs, $75m for the supercomputer product transition – Cray will eventually end up in the high-end Origin line – and $40m for asset write-offs. Merrill Lynch thinks first quarter revenue will show a decline of 19% to $627m. SGI expects to be profitable in its third financial quarter. The Visual PC NT workstations are due in December quarter delivery and it’s expecting NT sales to be worth less some $500m – 700,000 units – in the coming financial year. Meantime further to its plan reveled here some months ago (CI No 3,361), Silicon Graphics Inc’s setting up a business unit chartered to develop and market hardware and software tuned for Oracle Corp databases. It wants its servers to be used for commercial as well as scientific and technical number crunching. á
