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SGI faces layoffs, merger?
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October 24, 1997: 5:36 p.m. ET
Computer maker declines comment on report of major reorganization
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NEW YORK (CNNfn) - Silicon Graphics Inc. declined to comment on a report suggesting the world's largest maker of visual computing systems is looking for a strategic partner.
The Mountain View, Calif.-based company is expected to announce a major reorganization, including layoffs of hundreds of workers, the San Francisco Chronicle reported on Friday.
In addition, Silicon Graphics has attracted interest from IBM Corp., the paper said quoting "a source close to SGI."
"The company will make a full disclosure of our financial results and near-term actions" after the market closes on Monday, a company spokesman told Reuters.
Analysts are expecting SGI to report a loss of 20 cents a share in its fiscal first quarter, ending September.
The results as well as possible restructuring underscores strategic problems facing management, which has been criticized lately by the Wall Street community.
In his report issued Friday morning, Merrill Lynch analyst Steve Milunovich noted that SGI's strategy of positioning itself as a strategic computing vendor was a "mistake."
Still, the reorganization isn't expected to result in the ouster of Ed McCracken as chairman and chief executive, the Chronicle reported.
-- from staff and wire reports
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Silicon Graphics
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