SGI files for Chapter 11 bankruptcy

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Following the plan

The plan, you remember, is to have a CEO who changes plans but, most important, lays off essential staff until sales tank. Then that CEO departs with a large severance package and another is hired with a large signing bonus.

This process is repeated until bankruptcy. Then all executives receive large retention bonuses to assure they stay with the company, while surviving employees lose their pensions and their pay is reduced.

A few quotes:
"Before Bishop's arrival in 1999, then-CEO Rick Belluzzo also initiated a turnaround effort at SGI that included cutting 1,500 positions..."

Earned his bonus and being generously severed right there.

Quoting again:
"And under SGI's previous CEO, Bob Bishop, the company launched a restructuring effort in 2000..."

Ahm... do restructuring efforts involve layoffs?
But watch supercomputing. Perhaps a better word is "shuttlecock".

Back to the quote where we were:
"... to shift its focus away from selling supercomputers,..."

[away from supercomputers]

"... multimedia software and embedded chips for consumer devices to one that focused on much smaller markets, such as digital content creation and supercomputing..."

[but toward "supercomputing"]

"... for technical and scientific projects."


The plan continues:
"Its latest was initiated in March, when SGI cut 12 percent of its work force and hired a new chief financial officer and chief operating officer."

The company must have had to lay off staff to pay the executives.

"The moves were part of a plan from McKenna, who was hired as CEO earlier in the year. McKenna said he wanted to expand into new customer markets, such as telecommunications, that have high computing needs."

Earlier than March?
Laying off 12% of staff, including which staff they were, must have been obvious.
And do you think that telecommunications companies (pause to permit you to say "telecommunications??!") might need... supercomputing?

Posted by: Anton Philidor   Posted on: 05/08/06 You are currently: a Guest | Members login | Terms of Use

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