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SGI to layoff ~ 3000 employees, sees 2Q profit (UPDATED) 126

Posted by Hemos
from the double-what-they-thought dept.
A reader wrote to us with the news that SGI has doubled their original August estimates for # of layoffs, bringing the probable number to roughly 3000. However, SGI is seeing a return to profitability. The additional 1500 are not actually being laid-they are being offered new jobs with the new NT/Visual Workstations and Cray units, leading to the above erroneous information.
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SGI to layoff ~ 3000 employees, sees 2Q profit (UPDATED)

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  • This is sad. Of course, the people who go will contain a higher than representative proportion of their best people (the ones who are probably already being headhunted/looking elsewhere). When things get better for SGI (and I truly hope things do get better - they have some stunning products), they'll have a very difficult job hiring those good people back.

    My sympathy is with the people who are going to get laid off.
  • Hint: people work at companies

    until they get laid off ... How about if we just changed their ideologies instead?

    Cute.

  • by Wyatt Earp (1029)
    Hey what is Gil Amelio doing these days? Maybe SGI should bring him on and then get rid of him...it worked wonders for Apple.

    Then he can write...500 days on the Firing Line part 2...my time at SGI
  • With less people they will have less of a sales force, less technical support, and do less research and development.

    And services. They aren't going to keep the same amount of work over fewer people.

    In the end, all of the things that make money.

    No not really. What makes money is having people trade you their money for your service. If your service isn't able to support your people, find one that will. It would be nice if nobody lost their job in this transition, but its tough to do.

  • I'm not sure I agree that reliance on 'proprietary processors' hurt it.

    Name a processor that isn't 'proprietary'!

    Do you mean they relied too much on internal processes when they should have used available resources that fit the need? Like they're doing now? Intel PIII Xeons, instead of MIPS, Beowulf clusters, instead of freaking expensive supercomputers, and Linux instead of Irix? Take four years ago. What could they have done differently? Linux was still but a babe in diapers, comparatively, and the PIIs didn't have the scaleability or robustness or price point to make them great buys. They could have bought DEC Alpha, I guess, or used Alphas instead of MIPs... But Alphas were just as expensive, and still are, to some point. And about OSes, the only other choices they had were HP UX, OS/2, AIX, Windows NT, DEC's OS, and maybe some others.

    I don't know that I believe that the high end graphics market isn't lucretive. What should they focus on instead? Servers(vs IBM or Sun or HP)? Supercomputers(vs IBM)?

    It may be necessary to cut loose employees--but that is a lot of talent that they are losing, and a lot of future growth they are sacrificing.

    I don't know that I agree with SGI's current focus. But my fingers are crossed for them!


    -AS
  • This is a good thing. It isn't as if they're laying these people off because they can't afford to pay them anymore. They're trimming the fat. This is something that needed to happen years ago.

    I'll agree with you that this is going to be bad for morale, but so is several years of losing money. With several profitable quarters behind them now, any negative morale will most likely be offset with optimism for the future.

    Or I could just be full of shit.
  • Nike and GM are hardly examples of companies in trouble. Apples and oranges.

  • As someone who worked for Compaq this summer, on Alpha stuff, I feel the need to note that Compaq does support things other than just PCs.

    That said, I think that SGI's recent actions baffle me. They seem to, in fact, be offloading everything that has an unique value.

  • Which is what they were saying. It doesn't really matter why the CEO is being forced over hot coals, the only matter is that he IS, and people are getting canned for it, not for any performance reasons.
  • That apple recovered is debateble. Their original machines have a nifty specialness to them (when they were made) but not that many people liked them. So now Apple is back on its feet bu the Mac is WAAAAAAAAAY different. Its colorfull, more stupid-friendly, and has better advertising. Apple is back, but the Mac isn't.
  • by Anonymous Coward
    Sadly enough it is not that easy. Our company stopped to support SGI too some time ago. Our customers just do not use them.

    In the area where SGI is strong though there are alternatives despite the fact that their overall architecture is for sure light years ahead of what even an advanced PC is having under the hood.

    I do hope though all that people are going to find a new job soon and that this share holder value first madness is coming to an end too. People with out a job do not spend much money for anything, neither services nor goods finally.

  • Question: Who will buy SGI?

    - Microsoft
    - Sun
    - AOL
    - Apple
    - Compaq
    - Rob Sux/This Poll Sux
  • I'm sad to say it, but frankly this was in the cards long ago. SGI's reliance on proprietary processors hurt it greatly. In addition, the fact that SGI plays into so many different markets (servers, workstations, high-end graphics, processor cores, supercomputers, OS) against so many large established players didn't bode well. The high-end graphics market, while being very sexy, wasn't ever going to yield the kind of revenue they needed. Now they're slowly trying to re-position themselves and cutting loose alot of employees. Frankly it was a necessary move. I'm sorry to see so many of the "oh greedy corporation, cutting loose people to turn a profit" arguements. Perhaps one day when you get out into the real world, start your own corporation and are answering to a board, and your stockholders, you might see why something like this is necessary. Now that SGI is finally trying to get a handle on the market and refocus their efforts, perhaps they'll be able to turn it around. I certainly hope so.
  • VA is a 200 person company. Cobalt is a 35 person company. SGI is a 9,000 person company. SGI invested 6 mil in VA. SGI has something like 750 million in the bank (it used to be over a billion but they burned through a chunk.) Redhat has a large market cap which doesn't equate into cash. VA had just 15 million in sales last year. Buy SGI? No not really.
  • by Anonymous Coward
    Actually gcc does work without the IDO. For 6.2 you have install additional libs off the installation CD's & get it off the web, for 6.5 it comes on the install disks precompiled and will load any libraries needed. If you are using something older than 6.2 than you only have yourself to blame (actually I think I had a gcc for 5.3 but that was many years ago). Actually I don't know why so many people rag on SGI for this, Sun doesn't give anything away on their distributions, but nobody rags on them about it. Hell SGI precompiles it for you and puts it up as a freedownload hosted on their own equipment. They practically wave gcc in front of your face with it being distributed on the install CD's (with a ton of other GNU utilities).

    I'd say they do give a rat's ass about the community, or else they wouldn't spend the cycles to precompile up GCC, KDE, etc. and let you download them off of freeware.sgi.com. They've been doing that for years too, not directly profitable for a company but I think they realize the added-value it brings to the customer.

    I do agree that the cube rocked... they should have just done the corporate name change to SGI (did anybody really call them Silicon Graphics Incorporated anymore?) and left the cube there.

    I just hope SGI lays off their completely idiotic, moronic, marketing staff (do you sense the love in the room). People have been complaining about them for years, maybe this way they can get rid of some of them. The only idea that they seem to be able to think up is to change their logo. Boy that shows that their servers can push more data then any other server...

    SGI rocks, their marketing & management sucks

    tsuiter@midusa.net
  • It seems as though SGI is creating all sorts of problems for themselves simply by being as short-sighted as they are.
    In 1996, they acquire Cray, which in my opinion, wasn't as bad a move as they're implying now. Then recently we have the famed name/logo change, layoffs, the divestiture of their so recently acquired Cray division (where I did some contract work) and the NT Workstation division, the CEO changes, etc...
    It seems as though they're making such radical changes without any thought as to any far-reaching effects, possibly just to see the stock price get up above $12 for a while. Sure, Q2 might be profitable - but at what cost? It's all superficial, and I'm surprised the stock market fell for it.


    "During your times of trial and suffering, when you see only one set of footprints, it was then that I was riding the pogostick."
  • Okay, this article by Reuters is not exactly newworthy. According to the head honchos at my company (SGI, that is), there is no new news. This is exactly what was stated in August: Approximately 1500 will be let go (already done, BTW. No news there), and that approximately 1500 will be reduced as non-core business are spun off (this effort is still underway). This isn't profit, this is in fiscal planning. We need to focus on markets, focus on technologies and build things. We have and continue to invest in MIPS processors, IRIX (our Unix OS) and now have a committed technology investment in Linux (which is my job, so I'm keenly interested in this). We have a leadership team (including Bob Bishop, Beau Vrolyk, and Steve Gomo) who are committed to keeping us on course. So, bottom line: This Reuters article is rehashing old, old, old news. SGI is alive, and planning to be around a long time
  • Oh, I know that. It's just that without any of the 'sexy' stuff or the unique stuff, what will SGI offer that Compaq doesn't?


    For now SGI has strengths in graphics and some neat memory technology. They have *excellent* mindshare, what with being involved in just about every single blockbuster high tech sfx movie ever released, and some really good talent, from what I hear.

    I hope they do better without their 1500 people =(


    -AS
  • You can get more information on the Linux/Open Source XFS at http://oss.sgi.com/projects/xfs/ [sgi.com].

    Since it will be GPL'd, we're very likely to see it in the kernel. But it won't be soon -- there's no code there yet, and we're almost at feature-freeze for the 2.3/2.4 kernel. And I doubt it will be the default: ext2 is pretty good, is relatively lightweight, and most importantly, is tried and true. And, for the future, the ext3 project has a lot of equally exciting features -- and since it comes from "inside", from the same people who've been working on the current filesystem, it may have better integration, not to mention better mindshare.

    --

  • Well, since I work for the company in question, I know that in the short term this will cost the company money, just as it has the numerous other times its happened. As another employee stated the news report was factually incorrect anyway. There are approximately 1500 layoffs. With the divesture of Cray Research and the Visual Workstation business unit the number goes up to that stated.

    I'm not arguing that this is good news, because its not, but you're basing your opinion on an incorrect press release and random judgements pulled from thin air (to be generous)

  • Actually layoffs reduce profits in the near term. Severance packages are expensive.

  • "SGI is alive"...

    and on life support... In my opinion SGI has lacked true direction and leadership. Going after strange markets, with little or no planning, and not focusing on their core business.

    SGI is crippled seal trying to compete in shark infested waters. Which is sad, because they do make some pretty decient boxes (tis unfortunate Irix is a p.o.s.)

    btw we use Orgin's, ChallengeXL's, and Indy's here at work. We are moving to Sun E4500's and Ultra 5's and 10's.
  • dont suppose you could land me an SGI job ? I'd love to work for SGI (its been my favourite company) before it falls apart completely..based on the current status..looks like it might float for another year or two...hopefully more.
  • This just dawned on me. If they *do* go out of business (ie, just mildly bankrupt, not hundreds of millions of debt), what happens to their intellectual property? I presume that any bankruptcy court would sell of their physical property (buildings, equipment, etc)first to pay off debtors. But what happens to stuff like OpenGL? Graphics tech designs? Software? Do they then sell that off to the highest bidder and send off final checks to shareholders?
  • This just proves my point of what I've been saying all along about SGI, ever since they started selling Wintel systems.

    They're just another Packard Bell.

    "The number of suckers born each minute doubles every 18 months."
  • I agree that it's sad to see they are laying off 3,000 employees. But think about it for a second. SGI isn't in business to give people jobs. They are in business to make money. These people will find other jobs. How they handle the employees who were dropped from payroll is more of an issue than anything else at this point (i.e. will they provide support to the layed off workers in getting a new job, etc.)

    If they aren't making enough to stay afloat (or if they forecast that they won't be), they obviously need to push some of the dead weight overboard. Otherwise they will be destined to sink.

    It's always funny to me when people post stuff like this.... saying companies are so bad to do this. Try owning your own company for a while - especially during a slump in your market segment or during a recession - and see what you think then. When it comes down to it, it's either a few of the sailors now or the whole ship later. Which is worse then?

    If they didn't do this type of thing to stay in business, I would be more worried about buying their product than if they did. There's nothing worse than owning hardware from a company that no longer exists.

    --SONET
  • If we can start these people churning out open source code, we won't have to work any more.

  • Doesn't XFS have ACL support also? While not a real popular feature in the Unix crowd, it would make your typical Novell or NT admin happier.
  • Perhaps the name change was for legal reasons -- if they no longer make their own graphics hardware, it actually might be illegal to call themselves "Silicon Graphics".

    Or perhaps not. It just occurred to me because similar reasons killed the "International Harvester" brandname. (Now "Navistar", FYI.)
    Plus, maybe in 20 years, SiliconGraphics will make a good /. handle.
  • i think it is good new. i would suspect most of the 3000 employes that where fired will start some job in the linux field.. with their unix know-how they can help the cause of linux...
  • Who says that Compaq doesn't research or innovate? This is the what has kept Alpha architecture out in front of SUN, IBM, HP, Intel, and MIPS. Of course, there are doubts to how much longer they can keep it up. Dropping NT support doesn't seem like a positive sign. (Well not for SGI at any rate.)

    Svencer
  • Hey, I didn't say Compaq doesn't research or innovate. I just said that SGI's research helps it to differentiate itself from Compaq, otherwise they are both companies that sell RISC servers, RISC and Intel workstations, supercomputers, Linux machines, Beowulf clusters, UNIX OSes, etc.

    It seems a good idea that SGI dropped NT, if only because they would be hobbled by Microsoft's development schedule.

    Now we have to wait and see if SGI's plan has any merit!


    -AS
  • Someone should let that idiot run a company some time...

    Dog Eat Dog Films, I think it's called ...

    yup [dogeatdogfilms.com]

    The man runs drives to unionise his own staff. I call that downright masochistic.

    jsm
  • I hate seeing companys drop 3K people to pull a greedy profit, to me this sounds like bad managment and just plain horrible people planning.
    If I was in charge of buying computers at a graphics co I would think twice before buying from a company that does this.
    -Kancer
    -Just a sap at heart
  • It's an easy way to make a company profitable again, just reduce your expenses so it's less than your income.

    Of course, this only works in the short term. Without your staff it will be *much* harder to generate new revenue. And without new revenue it's impossible to hire new staff.

    Yes, it's a downward spiral, and one that I fear SGI won't be able to pull out of.
  • The layoffs will OBVIOUSLY make their earnings look better. It means that they temperarily have the stock onhand, without the payout of 2-3k employees salaries. They WILL post a profit from it, but I'm still undecided as to if they will continue to do so, or go down the tubes.. This is to bad..

    It actually makes Linux look BAD in a way, with all of the press SGI has been gearing twards it's use of Linux..
  • The brief mentions laying off almost double it's previously announced expectations as well as outsourcing much of it's costly research.

    What I've got to wonder is *who* SGI is laying off? They have some unique and powerful technology, and the research is what differentiates SGI from, say, Compaq. If they stop innovating and exploring, they *can't* offer any value over Compaq. Of course Compaq may decide to buy out SGI anyway =)

    -AS
  • ..of companies like Apple where a lot of people who are employed there would work for half-wages or even free over short periods of time just so their business could get back on the ball. Not that there are a lot of "big companies" that really care about their employees, anyway, even though every company I've ever worked for says that what makes their company different is "the people".

  • They are open sourcing every piece of IP they own. They don't care about the community? They are GPLing it. Right now they are bleeding money and they need to stop. Unless you think keeping everyone employed until they go out of business is a good idea. SGI is getting behind Linux (with investments with VA Linux and Linuxcare) and open sourcing their IP. I doubt the logo change is the source of their current problems. Failing to price product properly in the marketplace is probably a larger problem along with poor customer service.
  • "Theoretically, if I cut costs enough, we'll be profitable without selling any product".
  • Greed has killed a lot of companies for the sake of a quarterly earnings report. The reason most of us drive foreign cars is during the 60's and 70's the american manufacturers would change the fin size of a caddy and call it a new model year, while the japanese were putting their effort into r&d. slowly the americans are catching up a little, but it's much worse in the tech biz. Innovation is all you have to seperate yourself from your comp. Look at how amd took over the under $1000 pc market in a year because their processor was better and cheaper. SGI will only survive if their products are the best, and firing a few thousand seasoned employees and hiring scabs ain't gonna do it.
  • Im e-mailing him now...
  • a) Unlikely. It's not necessarily that well suited -- xfs is useful on servers, where fscking for a long time (say over several hundred gigs of RAID diskspace) can be a real turnoff. But xfs is a big-iron solution -- it has overhead that will make it inappropriate for workstations with limited diskspace. In addition, there are efforts (which may benefit from xfs) such as Tweedie's ext3, which will journal and may also be more reasonable for lighter weight applications (you'll have to ask him about that tho ... ).

    Put it this way: if you haven't lost a day of productivity for a whole team of people due to a server fscking its drives after an unplanned/unclean shutdown, you don't care about xfs. On the other hand, if that's you ... you might really want it in there. I think there's a good chance we'll see xfs pretty much straight dumped into the kernel in the near future (perhaps in the 2.5 series). Later we'll see (hopefully) more elegant solutions based on previous work, including parts of xfs.

    Anyone care to comment on more precise schedules for these projects?

    b) Probably none. SGI's commitment to Linux is too strong. Better yet, as a strong point of Free software, all they have to do is release the source and let the Linux community do the work.

    An interesting property of the OS: If MS goes out of biz or decides to drop some OS, you're fsck'd. But while a key programmer on a Linux component losing a job and being forced to go elsewhere to work on unrelated stuff to make ends meet can hurt a Free project, it can't kill it, the way Amiga abandoning its userbase will (IMHO) kill the Amiga community, which can no longer expect any progress on a completely closed system.

    Offtopic-bait hint to Amiga: Free the source, if you want it to live ...
  • If I was in charge of buying computers at a graphics co I would think twice before buying from a company that does this

    If you were smart you would worry even more about bying from a company that could cease to exist if they didn't lay off workers.
  • by lil_billy (25771) on Tuesday September 14, 1999 @07:16AM (#1682259)
    Four people that I went to college with began working at SGI after they graduated. I remember hearing from two of them of at least two instances where they were told to "take a week off" without pay. To me, this is crappy management at it's best.
    At least three of the people moved on two other companies within one year of starting there. That says a lot to me about SGI and their work environment.
    ...this from a company that used to have huge 'beer bashes' each Friday and kicked out more colorful free t-shirts for their employees than fruit of the loom. All of those perks went away when profitability started to fade. With those perks went morale as well, I suspect.
    One wonders whether the solution is much like Apple's or Tektronix's decision to cut the proverbial 'fat' and move back to their core business of profitability. Isn't this something SGI began a bit ago?
    Anyway, that's my $0.02. I'd love to hear what some insiders think.
    -lb
  • Short fsck times is not the only benefit to be gained from XFS/any journaling file system. Journaling filesystems are typically far more stable than non-journaling, and are less succeptable to data corruption during crashes. SGI was so confident in XFS, that they didn't even release repair utilities for it during the initial release! (They were released soon after, but still...) As for extra overhead, yes... XFS does require a bit more overhead than ext2 for storing data, but the overhead is not seen in performance, but in disk usage. The space used is small, though, and rarely missed (a few megs for every few gigs, or so.)

    If given the option, I would definitely choose XFS over ext2. I'm not too familiar with the ext3 project, though, so it may be a better choice.
  • Of course, this only works in the short term. Without your staff it will be *much* harder to generate new revenue. And without new revenue it's impossible to hire new staff.

    Oh Bullshit, once you start growing again, it is easy to hire new workers....

    Why do people get all bent out of shape about stuff like this? This isn't Japan, you have to right to employment for life or anything like that... geezz...
  • Well considering this is the "first post" (I thought I would never have to use that line on /.)

    I could see my comment being moderated as perhaps obvious but not redundant. Yes, the two ways to increase/maintain profits are (pardon the lesson)

    A) Increase revenues (sales)
    B) Cut expenses

    Now, this new CEO is probably wanting to make a favorable initial impression on shareholders. I could be mistaken on this but usually the CEO's definition of job security is keeping the shareholders happy, financially and sometimes otherwise. (ie: old Steve Jobs, I think)

    To get that favorable first impression, the CEO thinks, "I need to have a profitable quarter under my belt right off the bat."
    Perhaps SGI tried all they could to increase revenue of sales. Even I've seen the hype around the 1400L series. Unfortunately, the company's sales didn't make the level hoped for so...switch to option "B".

    Not pretty but the rule generally means that the lowest positions(it would be nice if they were the least important to the critical path but this isn't always true) in the business model are liquidated to cut the company's burn rate, or expenditure.
    To clarify, "lowest positions" = techs, R&D, interns, etc. in a technical business. I have yet to see a company that classified management in the "lowest position" category...after all, who is handing out pink slips, someone has to do it.


    -Vel

    Ack! I'm a physicist...last thing I thought I'd be lecturing on is the basic business model. Look what you've done to me. I may as well wear a suit & tie, stop coding PERL and stop drinking Dew. >;)
  • by Anonymous Coward
    He'd pull his time-tested routine - he'd stare down some security guard at SGI who has a tenth-grade education and pepper him with all of his insipid platitudes.

    Michael Moore is nothing more than a baby-boomer crybaby who stamps his feet and pokes you in the eye when he doesn't like the way things are happening. He's never had anything substantial to say about American society that I haven't heard from ninth graders.

  • Im so dissappointed. I thought that after I quit being a Mac fan, I wouldn't have to watch a company I love downward spiral.

    I'm sitting in front of my R5k indy recalling the recent moves by SGI:
    • moving from MIPS to Intel (and I hate intels) (yeah yeah, they support both, but they've sold their controlling shares in MIPs and have been heavily marketing their NT VisualStation.. i can see thru the smokescreen)
    • Dropping one of the coolest logos in the industry for jafa (just another f** acronym)
    • and finally, hey folks, i like linux too, but how is SGI going to support Linux, IRIX, NT on machines with intel and Mips based processors while trying to tackle the OS, Hardware and Software industry with a reduced staff?


    About 1 year ago, I handed the clerk at the front desk my Arden Hills Control Data Corp security badge as I walked out of a nearly vacant building with quiet dark hallways... a ghost of a once great powerhouse of computing innovation.. i just hope that you wont have to do the same.

    -Z
  • Hey, doesn't Red Hat have about enough money to buy SGI now?

    (Joke. It's only on paper.)
  • So what's your point?

    The number of people layed off each week is irrelavant without knowing how many people are hired each week.

    Try reading an economics text sometime...

    HTH
  • You left off "Nobody", but I suspect that if the price were cheap enough someone would at least want their graphics technology. I can't image anyone would want them for anything else.

    For some reason I can see Apple wanting their graphics technology for the Mac. They don't seem to have a problem with proprietary hardware solutions and they have a big hold on the graphics market as it is. Having workstation-class graphics technology might enable them to position the Mac as more of a "serious" computer for academic/science types looking for workstation graphics solutions.

    MS doesn't want a hardware company, although they might want OpenGL. It doesn't fit AOL's business, and Compaq still doesn't know what to do with the Alpha and DEC Unix. Sun might be a maybe, since they already are a Unix workstation vendor, although the high-end graphics market is probably out of their Internet/Java business mode these days.
  • Well SGI has a Linux team and they still fired 3000 employees so guess making a living on Linux isn't an option for most people. That's how problems get solved after your 4 year vacation. You either work or you don't. There's no compromise, no grading curve, no dropped test scores, just layoffs and hires.
  • Well, it's just that - the companies are being led by these supposed geniuses of industry, commanding multi-million dollar salaries, stock options and golden parachutes - these guys screw up, and can't come up with anything more creative than "fire the peons"?

    Figure- Joe Executive, and his good-ol-boy team of a half-dozen Mercedes-driving golf buddies, if they were to all take a 50% pay-cut, none of them would be in any danger of starving, and could probably save a few hundred engineer jobs.

    "The number of suckers born each minute doubles every 18 months."
  • Microsoft, so they can butcher -er, embrace and extend OpenGL/Farenheit.

    "The number of suckers born each minute doubles every 18 months."
  • If I was smart...
    I would look at the 40% drop in there stock today and wouldnt go near there company for anything. The lay off hurts more then that -think about the moral of the workers(am I going to get layed off today?), think about them trying to hire back anyone- would you go and work there now?
  • by mvw (2916)
    we all know we want to do something impressive with Linux, IRIX, and our amazing graphics hardware, and we know that technically we can pull it off. Nevertheless, we're not sure if the rest of the SGI structure will be able to "put it out there" with a story convincing enough to put the company back on track.

    You may have noticed that many folks here have the impression that SGI is not able to continue IRIX development adequatley. This is by the way, what I thought in 1995 during IRIX 5->6 transition. How do you see the proposal that SGI should focus their OS R&D capacity to open systems like Linux?

    Normally I'd post with my account, but today is different -- I'm about to leave SGI myself... I'll miss it.

    No more SGI? A catastrophy for every real geek (I'd rather see Apple going down ten times).

    At least part of SGI will life on for some years in the incarnation of nvidia.

  • I did not mean to imply that the MIPS processor was the only proprietary processor out there. It clearly isn't. My complaint was more that SGI tried to do far too many things at once. It succeeded for quite awhile doing all these things. But keeping a processor architecture on the cutting edge is an inordinately difficult task. And SGI wasn't exactly forthcoming about the architecture (I don't remember the licensing fee for a MIPS core, but it was ungodly even then) so there were very few ports. And I'm sorry, but IRIX is a poor unix.

    Now, I don't know what the ultimately best choice for SGI is or will be. They had an extremely strong server following for a long while and did quite well against Sun, IBM and HP. Additionally, their workstation business was also extremely successful, however the main niche there was its extreme graphics performance. That industry has now become over-populated and would have overtaken SGI's dominance in another generation or two. The decision to offload to nVidia was a wise one. So like I said, I don't know what they should do. I just know what they did, and that it failed.

  • by Anonymous Coward
    SGI has always been interesting. Very interesting, and almost impossable to read.

    I don't think you can judge exactly how this layoff will affect them, at least not without knowing who they layed off.

    I'm still trying to figure out the MIPS [mips.com] deal, so I guess there is no way I can understand this one. First, they spin off MIPS to outside development. Then they move to some Intel based hardware, blah blah blah Merced, blah blah, look at our new Xeon box.

    Meanwhile MIPS makes inroads in the PDA, portable and gaming markets, shoots up in stock price, but over the last few weeks has been on a decline too (along with SGI). But wait, it's not that simple (of course not). MIPS (the mips.com people) announce that they will focus on the older MIPS designs in newer markets... Yet, at the same time, SGI pulls out thier "time-line/road-map" and confuses the heck out of everyone talking about thier plains for MIPS boxes for several years to come. So, how does that happen? Inovations in MIPS have to come from SGI?

    SGI's hardware timeline uses MIPS well past the projected Merced introduction (which is good, can't put all your eggs in one basket, and MIPS is one of the best things SGI has going for it). But, now MIPS is MIPS and not part of SGI, so, who do you count on?

    So, more layoffs.... Well, are they laying off factory workers who put together boxes because they are not selling enough? Or are they laying of designers of systems and software developers? It's all a blur they are spinning so fast. I use to be convinced they were driveing themselfs into the ground, now I just don't know, with all the RADICAL moves, maybe they could make an upswing?

    For one, they CAN'T dump MIPS in favor of Intel, that would seal there fate and burry them deep in the ground.... That puts them as a small player in the world of Dell, Compaq, Gateway, etc... Bad move. Not to mention VA has that nitch as far as Linux/Intel goes already. And SGI's pricing and maintainance/support price structure is very weird for a modern market anyhow, when IBM, SUN, and all the "big boys" are moving to openly posting product prices on the net, you have to make tons of phone calls and wait days for an SGI price quote, only to have your jaw drop open and go "WHAT? your Joking, Right?"

    But if they dump MIPS developers, and the MIPS guys go over to MIPS (proper, the MIPS company) that might be good, because it means development continues, just under diffrent roofs.

    Dump the IRIX guys I say. IRIX is plagued with problems for SGI's market. If they can retain enought IRIX guys to get all of IRIX to be replaced with Linux, that would really reduce development costs, and possably (with a lot of work) benifit thier OS usability and also gain support of the Linux community.

    Counting thier assets that set them apart in the computing market, they have 1) Name Recogintion 2) Cool Hardware (read MIPS) 3) Loyal Client base (which they better bust thier butts to keep, because some are waking up to lower cost alternitives now).

    Counting thier downs, they have 1) Horriable support at an outragous price (Read, unless you have an SGI box made in the last 2 years, support costs more than your hardware is worth, but without support which includes new OS releases, the hardware is worthless anyhow, you can only get the newest IRIX with the support contract, and old IRIX doesn't play friendly with new IRIX for networked SGI boxes without MAJOR tweaking). 2) A trend to move into the more highly competitive and less profitable Intel market. 3) Lack of "corporate stability" 4) Loss of a lot of good technical staff.

    I say, SGI -and- MIPS are probably good stock buys... Why? MIPS has a rocking future, it's thier ties with SGI that are driveing thier price down, they will rise, CPU alternitives are a good thing. SGI sucks, if they kill themselfs, they will get bought out by someone driving thier price up in the end ;-)

    My suggestions to the SGI CEOs (who won't listen) are: 1) integrate all of IRIX, and all of your software into Linux, get Linux on MIPS really working. Then your legacy hardware will retain it's value because people can still use it, you keep clients happy. They also lower development costs of software, and can work on getting a "support" department that really works (yea, I know some of the people there are still OK, but they have a lot of Bozo's too.) 2) CLING TO MIPS, it's the awsome hardware that has always set SGI apart, and made them rise. Intel is a nice "supplement" for low end stuff, and maybe even consider a Strong Arm X-Terminal? But don't loose MIPS... But, since they won't listen to me, maybe someone else will ... so, HAY VA... IPO and buy out SGI, and add MIPS to your product line ;-)

  • SGI product is responsible for the resurrection
    of F/X movie industry after dieing in the mid-1980s.
    Too bad a bad business strategy leads to contraction.
  • Ahh, I did not get that out of the release..

    But I'm curiouse.. They're basically trimming 1/3rd of the company. That makes little sense to me, and would seem to make the company ripe for the pickings by someone else. Is this going to end up being a digital situation where they trimtrimtrim, almost as if they WANT to be bought?
  • "The additional 1500 are not actually being
    laid-they are ..."

    Sorry, that just struck me as funny.

    ---------------------
    the SlashDot spellchecker:
  • Margin in the OS for the vender only applies to commidity machines where the margin for the hardware is next to nill, and the software itself is proprietarily controlled by the hardware vender.

    This doesn't (in general) apply to SGI. SGI does not own or control linux and is not responsible for any of the core development.

    Visual Workstations don't have anything to do with this statement as all the OS fee's are payed as royalties to microsoft.

    The only OS the support AND control, is IRIX, and it isn't free of charge, in addition, the're hardware has very large margins, which is supposed to make some breathing room for the OS.

    The only company that could possibly fit that statement would be apple, but the money they charge for basically commidity parts is silly, so your obviously paying a couple hundred dollars (like 500 for the low end. I have no idea how they set their pricing or scale their pricing; they're pricing model appears ridiculous without more information than they ever release.) for the OS.

    I can only assume from the brevity of the comment that distributing linux with their hardware reduces they're prices to an unacceptable margin.

    Hardly. They can charge a little less for the machine (no royalties) for the same expenditures on systems integration any hardware vendor has to pay, and still maintian the exact same margin.
    Maintaining the price and switching to a free operating system raises the margin for the hardware venders, making each machine more profitable.

    -Tilde
  • I attended the Linux University in Washington DC last week, and spoke to a few people at SGI, as well as listened to the many presentations there.

    I don't know about the layoffs, but I will say that everyone seemed quite happy and excited to be working at SGI on projects that involved Linux. I don't know about profitability, but their decision to providing full time personnel that contribute to Open Source projects is a big win for anyone wanting to use Linux.

    I hope this is part of a new trend and vision that continues to make them successful.
  • Well, having seen this all over, in many different industries, it's painfully obvious that:
    1) an MBA doesn't give the user any sense of reality, only the bottom line
    2) publicly traded companies are only concerned about the bottom line, and will continue to hire MBA's

    Your second point is the one I've always wondered about.
    How the hell is a company supposed to make money with fewer people doing the work?

    Then again, I took philosophy, not business classes at Uni, so I'm making assumptions based on reality, not on "business" sense :P

    pope
  • So the definition of bleeding money is a quarterly profit? I wish I bled more.
  • Everyone is attributing to their profit to laying off and not paying 3000 employees. Sure, that saves some cash, but the real reason is the shortened name. Think about it - instead of "Silicon Graphics International" they only have to print "SGI" on their products, stationary, the doors of their buildings, signs, etc. All that ink adds up and *that* is why they are profiting...
  • It is pretty sad to see SGI slowly fall down. I hope that they make it but it will be tough. At the very least I hope that their interesting technology survives.
    Although I wish they were not firing anybody, I hope that they are smart enough to keep R&D alive. Sometimes SGI seems to want to become Compaq (who isn't doing so well either) and make NT boxes their main thing. More recently they seemed to haved towards a pro linux stance. I hope that it is for real and sincere and not just a scared attempt at stabbing at anything that can help save them.
    How many of these layoffs are from up top? Not too many, I bet. You can understand a person leaving SGI for say...Microsoft. At least there your company is assimilating...I mean hiring people and not the opposite.
  • With cut rates being nearly a third of their staff, it indicates that they were doing more than just "going after a profit". Struggling to the surface (break even) sounds more like it. If you can't pay your debts its over.

    Its cold comfort, but its sometimes better to cut off an infected arm than to outright die. The real tragedy is having a leader who doesn't have the balls or brains to make tough decisions now, wastes time and resources, and ends up putting more people in jeopardy.

  • As of approximately Irix 6.2 (maybe even 6.0), header files are included with the base OS, so GCC can work without the IDO.

    I don't think most people are so superficial as to reject a company's products just because of the logo change. I wonder if my Indigo2 (with the old logo) will become a collector's item someday?

    D

    ----
  • any of you track first time unemployment
    appilcation numbers from week to week?


    approx. 300,000 every week

  • My institute has been and still is buying SGI equipment. It makes me (and probably most people around here) a lot more comfortable to see them take drastic steps in order to return to profitability than if they would continue to flounder. When you sign a lease for $3 million, the fiscal health of the partner is VERY important.

    I do feel sorry for those that were laid off. From what I have heard it wasn't all that bad for some of them, though.
  • Which text will give the weekly
    hiring numbers?
  • Here is a good source:

    Economic Statistics Briefing Room [whitehouse.gov]

  • How can you NOT when you have 5 employees and a few hundred grand in sales in one quarter??? hehehe......

    Sorry to see SGI still hasn't found the right CEO. Maybe whats-his-name is looking to make a few bucks on his options, bail, and then write a book about how he saved the company from ruins.....
    Oh well. Glad I'm not an SGI customer OR employee.
  • Oh Bullshit, once you start growing again, it is easy to hire new workers....

    Yes, but only if you start growing again. The only thing that will save SGI is if laying off 3000 people somehow gives them enough time to pull off a miracle. With less people they will have less of a sales force, less technical support, and do less research and development. In the end, all of the things that make money.

    Why do people get all bent out of shape about stuff like this? This isn't Japan, you have to right to employment for life or anything like that... geezz...

    I don't know why the do, and I hope you weren't implying I feel that way. I think ideas like government stepping in to save an industry or jobs is insane, as is NOT letting go of 3000 people if it will save the company.
  • I thought that after I quit being a Mac fan, I wouldn't have to watch a company I love downward spiral.

    Thank you very much for not being a Mac fan anymore, as Apple is now recovering quite nicely.

    Now, if I may: There's this quaint little company in Redmond named Microsoft. I'm sure you could grow to love them in a very short time. ^_^

    (There goes my Karma again)
    --

  • Depends on how and WHO they laid off..
  • Greed? It would be greed if they were profitable and then they decided to cut jobs. The fact of the matter is they have lost money for a long time and are no longer in a position to do so. I doubt very much that "scabs" are going to hired. In fact I doubt those jobs will ever be replaced. SGI is no longer in a position to support IRIX R&D which is why they open-sourcing everything they have. I love slashdot but most slashdotters have no idea about the difficulty of actually running a company. The comments where people talk about the corporate greed of SGI as it attempts to avoid going completely out business is amazing. Does anyone think they actually wanted to let those people go? What I found amazing is that SGI waited this long. They have been bleeding red for a long time.
  • by AaronW (33736) on Tuesday September 14, 1999 @07:25AM (#1682311) Homepage
    Announcing layoffs has a much more widespread effect than many people realize. When I was at my last job, they had a 200 person layoff. As a consequence, morale went through the floor and many of those who were not layed off left for greener pastures. They lost a lot of intellectual knowlege and experience which cannot be easily recovered. Furthermore, here in California, if a company lays someone off they cannot hire someone else for the same job for at least 6 months. SGI is in for a very rough ride ahead. It will be very difficult for them to keep those who were not layed off.

    When layoffs occur, it is some ways harder on those who were not layed off. You then start wondering, "when is it my turn to be layed off?"

    Being layed off is not necessarily a bad thing around here in Silicon Valley. There are a lot of job openings elsewhere, and usually the company doing the layoff offers a good severense package. I know that when my division at my last company was dissolved, within a month everyone had found a better job than they had, and with the severense packages many people did quite well. Everyone from the admin to the managers found new jobs quickly. Most of the people are happier at their new job as well.

    It is sad to see a company like SGI have a layoff. I fear that SGI may not be able to recover from this.
  • Acctually the brief states that their supposed profit is coming not from the money that would have paid the people they are laying off (Acctually having recently gone thru a layoff, I know that they acctually end up giving a lot of money to those who are let go), but instead it is coming from selling off parts of SGI:

    the sale of certain non-core businesses in the restructuring would begin to make the company profitable in the second quarter ending December 31
  • by aheitner (3273) on Tuesday September 14, 1999 @07:27AM (#1682313)
    SGI has to redefine who it is. Of course the logo thing was a mistake -- long live the old SGI logo!

    They have a serious problem: you don't need a crazy SGI station to do graphics anymore. You'll do decently well with a high-end PC, 3DSMax, and good consumer graphics hardware, and for a fraction of the price. There was a reason so many people fell in love with equipment like the original Indigo (mmmm....purple box): it got the job done in a much more primitive age. It was the only way.

    I recently heard a story about a little graphics design company a couple of years back (not all that many years, either, maybe 2 or 3). They didn't have money for SGIs, so they invested in PCs and MAX back when MAX was the first product for PC that didn't suck. They would get clients interested with samples, then give a tour of their office. When the clients saw they used PCs, they ran away. So then they got the clients interested, but made excuses why they couldn't visit the office ("We're painting...","We just moved...","There was a water leak, it's a mess..."). After that they started landing jobs and making money :)

    But nowadays you can equip a 3D artist with a $2k PC and a $2500 copy of MAX and be in good shape, rather than SGI equipment and software totaling 4x as much.

    So that's their problem. I don't know what the solution is. Linux is great, but it runs on cheap PCs too :)

    I guess if I knew what the solution was I'd go be the CEO of SGI ...
  • Congress needs to increase the
    number of Visas, don't they.

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