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SGI Announces Restructuring, Cuts 400 Jobs
kerneljacabo writes "Yikes! SGI seems to be the lastest victim of the economic downturn. Today they announced an extensive 'restructuring,' which includes releasing about 10% (400) of their employess. Seems like no one is immune." SGI claims this'll save them $40M, as well as improve their performance next fiscal year.
It seems to me that SGI's major problem is that they were always a one-trick pony -- they made the decision to stick with graphics machines at a time when that particular niche was sliding towards being a commodity, or at least commodity-doable. When Jurrasic Park came out, it was like a birth cry. When Titanic came out, it was a death toll.
They tried to branch out, but their directionless, clueless management (I'm looking at you, Chainsaw Rick Belluzo) flailed around towards one ill-concieved scheme after another, and all the while powerful PC-based workstations were dropping in price.
IMO, they should have concentrated on appliances. I remember pilot programs floating around to do things like massive network storage (a la NetApp) and other similarly promising things, but they never went anyplace.
Oh, and I had a Herman Miller Areon and an office. As an intern. Might have been a symptom of part of the problem, on reflection...
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
Well, it is probably close to that amount. Depending on location, they can probably stop paying the lease on one or two buildings, as well as the electric, water, and insurance on those buildings as well. For decent office space, I wouldn't be surprised if they were paying 2-5 mill a year on the buildings.
And remember, its not just the actual salary that they will save, its also the benefits as well (no decent company is without good health care, etc). And it is also counting in the interest they will earn on the money they are saving as well. That is another 3-7% right there.
So that means the average salary+benefits package only needs to be about $85,000 or so per person. And to be honest, that number is probably about right. Especially if these people are engineers or programmers.
We were all warned a long time ago that MS products sucked, remember the Magic 8 Ball said, "Outlook not so good"
When I worked for them in 99, they already had cash flow issues, and had had them for some time. But Wall Street has always loved them, so they always got more cash when they needed it. Many people who worked there thought this was actually a bad thing. I guess Wall Street has finally figured out that their business model is just not working.
I went from SGI to Borland, which has cash up the wazoo. They got a huge patent settlement (disguised as an investment) from Microsoft, and have mostly been in the black lately. But Wall Street doesn't trust Borland: too much weirdness. (Personal trauma prevents me from being specific.) So we were always under pressure to cut costs. I once had to go all the way to Dale Fuller for a $200 memory upgrade!
Publically held companies live and die at the sufferance of Wall Street, no matter how well, or how badly, they're doing. I imagine that's why Google is still privately held, even though an IPO would make a lot of the people there -- maybe not rich, but certainly comfortable.
The corp can use the temp numbers as headcount scavange data if they so chose. One data set says 'lean' (low fulltime count) and another says 'leaner' (cut temp count). That's why I'm never impresssed when a corp claims cutting staff is necessary to cut costs.