Silicon Graphics Inc. (NYSE: SGI) revealed Tuesday plans to refocus its computer workstation business, and unveiled its second restructuring in less than a year, with plans to spin off its media operations and shed up to 1,500 jobs.
Shares in the Mountain View, California-based company dropped more than 8 percent, down 1 5/16 to 14 7/8 following the news.
SGI blew past analysts estimates in the fourth quarter, the pivotal point for its turnaround from disappointments and product delivery problems.
SGI announced seven major restructuring moves which will focus the streamlining of its operations which has been underway for the last 18 months, according to Rick Belluzzo, chairman and CEO. SGI's workforce will be reduced by about 1,000 to 1,500 employees as a result of these alliances and related reductions in marketing, sales and administrative personnel.
Here's the breakdown of SGI's moves:
"The emergence of the broadband Internet over the next several years, together with the growth of Linux and other open source technologies, will create huge opportunities for SGI as a result of our leadership in high-bandwidth computing architectures and our established franchise with content providers," Belluzzo said of the company's refocusing.
Despite SGI's improvement many analysts have questioned whether the company can deliver successful products.