Original URL: http://www.theregister.co.uk/2003/08/28/sgi_to_let_600_more/

SGI to let 600 more workers go

Chasing break even

By Tony Smith

Posted in Data Centre, 28th August 2003 14:14 GMT

SGI will eliminate 600 positions from its workforce in a bid to cut costs, the company said yesterday. The announcement provides details of the restructuring, which SGI admitted earlier this week it was going to have to implement.

The move will increase the number of staff the company has rid itself of already this year to 1000, a quarter of the 4000-strong workforce it began its current fiscal year with. The first round of 400 job cuts was announced back in May.

SGI hopes the move will cut $100 million off its quarterly operating expenses bill once its forks out $20 million in redundancy payments.

That $100 million saving should allow the company to break even, provided it maintains quarterly sales of $235-240 million and its gross margins meet its expectations. That's a lot of 'ifs'.

It also means that the remaining 3000 staff plus other operating expenses will total around $135-140 million, so it's obviously ridding itself of some of its more highly paid staffers.

The restructure follows a plan to decamp from the company's Mountain View HQ to a nearby plant that's more cosy and where all those soon-to-be-empty desks will be less obvious. ®

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