SGI to sell Cray and shed 1,500 jobs

Silicon Graphics (SGI) is to slash up to 1,500 jobs worldwide, and is planning to sell its Cray supercomputer unit.

According to chairman and CEO, Rick Belluzzo, a massive restructuring will see SGI focus more on Linux, and create a new business unit to manage Cray Supercomputers pending its sale.

Belluzo admitted SGI is already in discussion with potential partners to take over Cray. A separate business unit will also manage SGI's Visual Workstation line of Windows NT workstations.

The SGI chief admitted a preliminary agreement has been reached with a 'computer systems company' to form a joint venture, but he refused to give any indication of the nature of the partnership as the terms have not been finalised.

The company is also moving away from Microsoft software and towards Linux. "We intend to deliver systems, commodity systems as we move towards Linux and open source. We intend to be on the forefront of this change," Belluzo said.

SGI will now focus on three market segments: high performance servers, visual computing and a new independent focus on broadband Internet systems.

Next generation graphics products will come from an alliance with 3D graphics chipmaker Nvidia, and NEC will help SGI sell servers into the Japanese market.