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SGI lays off 12 percent, names new execs

Company plans layoffs to help it recover from financial problems and will "aggressively pursue new markets."

Stephen Shankland Former Principal Writer
Stephen Shankland worked at CNET from 1998 to 2024 and wrote about processors, digital photography, AI, quantum computing, computer science, materials science, supercomputers, drones, browsers, 3D printing, USB, and new computing technology in general. He has a soft spot in his heart for standards groups and I/O interfaces. His first big scoop was about radioactive cat poop.
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Stephen Shankland
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.