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July 20, 2017

Cray to axe 190 jobs to save $25m

The supercomputer manufacturer is getting rid of 15% of its workforce.

By James Nunns

Cray is to axe around 190 jobs as part of a cost saving restructuring plan.

The supercomputer manufacturer revealed the job cuts, which equates to some 15% of its workforce, in a filing with the US Securities and Exchange Commission.

The company said that the layoffs would hit staff in: “all organizations and major geographies of the Company.”

Employees that will be affected will be eligible to receive severance payments and outplacement services, with other “certain eligible employees” also receiving additional benefits under the company’s Executive Severance Policy.

The move comes as part of a restructuring in the company, with Cray saying: “The elimination of these positions is expected to be partially offset by planned increases in headcount in certain strategic areas of the Company’s business.”

Read more: Alan Turing Institute turns to Cray for Urika moment

Although the company believes that it will incur aggregate restructuring charges in the

Cray

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range of $10m, most of which will be drives by severance payments and employment taxes and will be recorded in the quarterly period ending September 30, 2017.

Cray said that it hopes to save $25 million per year as a result of the job cuts.

There have been signs of the struggles at the company going back to its 2016 full year financial results, which showed a drop in revenue by around 13% to $629.8m, with profit dropping 61% to $10.7m.

Read more: The Cray CS supercomputer for AI taking the world by Storm

Although the high performance computer manufacturer has continued to find use cases for its systems, and has launched new products over the past year, it has clearly been hit hard by the rise of the mega cloud vendors and their ability to offer HPC as a service.

A shift away from physical hardware to an on-demand rented service has become commonplace and a look at any of the traditional hardware vendors shows that they have also seen a decline in revenue for this section.

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