SGI’s new CEO has wasted no time performing a major shakeup at the server company. Moves announced today include substantial layoffs, executive departures and SGI’s plans to tweak its server business. SGI will fire close to 12 per cent of its workforce – 250 staffers – in the hopes of saving some extra cash. Word of the layoffs arrives just about a month after SGI moved former CEO Bob Bishop aside and tapped Dennis McKenna as its new chief. SGI heralded the layoffs as proof of McKenna’s quick, decisive action, issuing a statement titled ‘CEO Delivers Aggressive Changes in First 30 Days as Part of Turnaround.’ The Inq speculates about nVidia buying SGI’s graphics dpt. Update: Couldn’t resist.
Gosh… And I stupidly tought that the “New Wave of the Net” times when a new CEO rumbled in and fired some 10-15% of personnel just to say “hello! i’ve arrived” were over.
I hope this is an healty decision for SGI and that will help such an historical company to really get back on track…
If you’re running an unprofitable company, the best thing you can do is get rid of the least profitable part of it, especially when your buisness is shrinking rapidly. And most of the expenses are always personell.
SGI stock rose 11.25% today. Somewhat ironically, stocks always soar when lay-offs are announced.
When NeXT merged with Apple the layoffs were 5,000. Yes this is a smart move for SGI.
NeXT brought new & exciting tech… I dont see iSGI’s down the pipe, Itaniums for the users, or IRIX on the amd64…..
I wonder if SCO will aquire their ip down the road & continue to sue IBM for the GPL’d XFS…..
That’s a heck of way to start a new postitive era by firing half of the staff.
Since when does 12% == 50%?
and we’ll forgive you and start buying whatever you’re selling.
Just another thought: Is that old SGI Logo for sale?
Edited 2006-03-03 23:41
lay off staff the where out of business little later. š
The big difference here is that SGI actually has (had?) customers…
– chrish
Sigh
I just like IRIX. I love sgi hardware (very solid design, nice looks). So I have some mixed feelings about the downward spiral sgi seems to follow.
But then again, I’d like to see what happens if SGI’s graph dpt merges with nVidia’s. Would that mean the end of ,say, ATI ?
Just a thought
Sigh
I just like IRIX. I love sgi hardware (very solid design, nice looks). So I have some mixed feelings about the downward spiral sgi seems to follow.
But then again, I’d like to see what happens if SGI’s graph dpt merges with nVidia’s. Would that mean the end of ,say, ATI ?
Just a thought
Yep, on that I agree, IRIX on Indigo back in 90’s was
:):):):) yiiiihhhaaaaaa!!!!
Design, same feeling:)
Prices???? … [screaming_and_runing_away] NOT THE SAME FEELING [/screaming_and_runing_away]. Especialy in latest price/performance ratio.
Well getting SGI gph dept would probably mean heaven to nVidia. They could probably extend from Quadro line upwards by gaining higher end solutions.
But one has to wonder how large portion of ATIs is connected to FireGL (as I suspect most of ATIs money comes from selling expensive cards for gamers). And FireGL dept would probably be the only one to suffer losses. Then again, I doubt it means too much and ATI probably wouldn’t really suffer.
Edited 2006-03-04 17:04
SGI heralded the layoffs as proof of McKenna’s quick, decisive action, issuing a
HUGE cash bonus to their new CEO which totaled nearly three times the money “saved” by firing the staffers.
š
This reminds me of the trouble they had at Philips. After a period of massive layoffs in which thousands of ordinary people lost their jobs (the cost of labour is to high in Europe don’t you know) the director of the board, salary approx 1 milion euro, sold his stock options for about 8 milion euros raised the salaries of the rest of his cronies on the board with 13,8% and then left the company getting another milion euro “golden handshake”.
People like that make me sick frankly.
We heard another pretty interesting story along these lines. The long-time CEO of Coca Cola died in 1997, and was repalced by his #2, Doug Ivester. During Ivester’s time at the company, a span of only a few years, Coke lost money for the first time in decades, and had a layoff of 6,000 workers. When he was forced to leave the company, he got a severence package worth over $100m.
Yup. The math and procedure goes something like:
1. figure out how much the company actually makes after expenses,
2. using that figure, split that money up among the executives/owners as salary and bonuses,
3. claim that, “The company’s not making any money! We need to cut staff!”, then either have layoffs or get people to leave by other less savory means (i.e. poor reviews/pay/working-conditions/etc.).
4. Let remaning employees pick up the slack and claim you’ve increased productivity! Insert bonus for executives/management here!
After step four, if the last of the bright employees haven’t already left, they leave now (I’ve heard it referred to as “bright-sizing”). Now you *really* can hear that whooshing sound of the company going down the toilet.
Edited 2006-03-04 02:35
That’s pretty much my cynical view of what they teach you in MBA school, except you’ve left off:
5. get massive golden handshake while leaving the company
6. move on to next company courtesy of your golf buddies
7. goto 1
– chrish
When Be Inc. began…
By Ralf. (1.50) on 2006-03-03 23:56:43 UTC
lay off staff the where out of business little later. š
Nice to see folks compare SGI to Be. I don’t know what parallel universe you live in but Be was never remotely as large as SGI.
I do not compare the two companies but I compare the two business decisions.
Edited 2006-03-04 09:27
changes at the bottom != changes at the top
For tech/computer companies to succeed longterm, people must dream of owning their hardware, namely kids or teenagers, they are the ones that are going to be sysadmins, CIO and CTO’s of the future.
When I was growing up I dreamed of owning a SGI or a Sun machine. But SGI has killed off the dream. They did this first by producing down right boring hardware for the last 3-5 years. Then they made it imposible to use there older hardware. IRIX requires a $600 a year fee to get a new copy. If they just gave away a hobbiest license and free downloads, it would cost a lot less than even a single full page ad in a computer magazine. It would generate a lot more excitement, or at least people might dream of owning there hardware again. They have a lot of work to do. Today if I saw a octane sitting on a junk pile I would hesitate to grab it, even though it was the ultimate dream machine of my youth.
Sun is doing the right thing, by giving away a few T2000’s people are dreaming of owning there hardware. Even if people aren’t lucky enough to win a system, they can still dream, and when the dreamers get into the data center, sun’s dreams will be answered.
I couldn’t say better. Weher is the affordable MIPS64 for every developer and the IRIX community? They are just a devastate company resorting to popular, more devastating, techniques. SGI/MIPS is dead! They are responsible and now, they are irrelevant.
Main problem with SGI is that in their head they still live in times when SGI was the king. Until they realize that world won’t buy label SGI only and just for the name, they will go down.
Sample of their prices
Silicon Graphics Prism Deskside Host System. Includes DVD-ROM.
2 x 1.6GHz/3MB Itanium2
2 x ATI FireGL X3 Graphics Card with 256MB Graphics Memory
3 x 8GB DDR 1 Memory (4x2GB), 133MHz
2 x 250GB 7200RPM SATA Drive
SGI Advanced LinuxĀ® Environment with SGI ProPackā¢
19″ LCD Flat Panel Display
Power Cord – USA, Canada
Global Services Warranty Card, System Registration and Services, Reference Guide for Systems Shipped Worldwide
USB Keyboard Kit – U.S.
CD-ROM Update Media Requirement – For Support Only
FullCare One Year Warranty
========================================
$38,941
SATA drives????
19′ LCD???
Funny thing, with machine for $40000 they even specify POWER CORD???? How low is one prepared to go to get one additional line in specs? Or is this some special power ultra_best_ever_and_I_mean_ever_since_the_invention_of_sliced_bread cord. I bet electricity flies there (hell, it’s better that it does, to power 2 Itanium2).
Their cheapest model here is $10000:
http://www.storejrt.com/prismdeskside_bundles.html
server prices
http://www.storejrt.com/a330_bundles.html
Who in the right mind would spend so much on Itanium???
And in case if anyone wonders what ProPack is:
SGI ProPack for Linux –Contains:
* XVM, NUMA tools (cpuset, dlock, dplace,) CSA (comprehensive system accounting), Linux jobs support,FLEXlm, xpmem (cross partioning user library), MPT (mpi libraries) and SCSL (math and science libraries), FFIO (flexible file I/O libraries).
* QuickTransitā¢ – IRIXĀ® to Linux translation tools for Silicon Graphics Prism
* Performance Co-Pilotā¢
* ESP (embedded support partner)
* IntelĀ® compiler runtime libraries
* REACT 4.2 real-time Extension
* Graphics and Digital Media support
* OpenGL Performerā¢, OpenGL Volumizerā¢, OpenGL Multipipeā¢, OpenGL Vizserverā¢, OpenMLĀ® Media Library
I wonder how stupid does one have to be at SGI not to understand reason for their failure.
Edited 2006-03-04 17:01
Talk about last nail in the coffin.
a. SGI doesn’t have much of a visualization business anymore – ask any oil company what they are thinking of their Onyx2’s and what they think of Prism, especially since SGI is only providing the most expensive ATI-based system
b. Nobody really buys SGI at that price. SGI has a long tradition for cutting their prices, especially in academics and (government funded) labs, as these are important ‘visibility-drivers’ for SGI.
c. SGI has tried to morph their business into a HPC/storage company, more akin to Cray (their low end XD1 offering) and much closer to Dell than what good is for SGI’s customers.
To quote a manager of research at a big US O&G company : The writing is on the wall for SGI.
-CEO
(And no, throwing SGI workstations after ‘wannahaveone’ geeks isn’t going to solve this)
Wouldn’t it make sense for Apple to buy SGI? Port everything of value from IRIX to MacOS X (Server) and grab the remaining good software engineers. Make use of the server business to improve Apples own offerings, Apple wants in on the servers after all.
SGIs workstations blow. Apple’s don’t. Smack in some better GFX (dual GFX card 2 x 16x PCIe anyone?) and port anything needed to replace IRIX workstations.
Apple would after this own a whole bunch of good patents and IP and on top of this some expertize on OpenGL. The whole deal just reeks of good sense.
Most of the really interesting unique server bits in IRIX are only really useful when you have servers with LOTS of CPUs. Anything else would probably be just as easy to implement from scratch as to port from Irix. I don’t really see Apple wanting to get into the 128+ CPU server business.
There is nothing stopping Apple from improving the graphics in their workstations on their own. If they need the talent they probably can hire it away easily enough. Given that Apple gets their cards from nvidia and ATI and would be stupid to make their own cards they have little use for sgis graphics IP and GPU making knowledge.
Basically I can see very little value for Apple in buying sgi.