March 3, 2006 9:28 AM PST

SGI lays off 12 percent, names new execs

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Silicon Graphics Inc. announced Friday that it will lay off 12 percent of its work force, about 250 people, and named new executives as part of a plan to recover from its financial problems.

In addition, the company will "aggressively pursue new markets" in corporate computing, bringing its historical focus on high-performance technical computing to more mainstream customers. The moves were announced a month after the arrival of SGI's new chief executive, Dennis McKenna.

"What we are adding to our sales targets are segments of the enterprise that have high-performance computing needs, such as telcos (telecommunications companies) or very-large-database users," spokeswoman Caroline Japic said.

The moves will mean a $20 million restructuring charge taken over several quarters but are expected to cut $150 million in expenses by the end of 2006. SGI stock rose 13 percent, or 5 cents, to 45 cents in midday trading Friday.

SGI Chief Financial Officer Jeff Zellmer and Chief Operating Officer Warren Pratt resigned from SGI "to pursue personal interests," the company also said. Kathy Lanterman, who has been SGI's corporate controller, will replace Zellmer as CFO.

In addition, the Mountain View, Calif.-based company's board continues to explore strategic and financial options, the company said.

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Silicon Graphics Inc., high-performance computing, CFO, high-performance, telecommunications company

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Same old thing, the financials look bleak, so the executive team is reshuffled and the rank and file takes the hit in the form of a lay-off to appease Wall Street.

How about if the executive team show some true character and commitment and work for $50k per year? This results in large cost savings and keeps more money in the economic spending pool which helps the general economy. American executives make (notice I didn't say earn) way too much money. When will stockholders and boards of directors tap into this rich pool of savings?
Posted by corporate_radical (4 comments )
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