Silicon Graphics to Cut 1,000 Jobs; Intel Chip Deal Planned

Computer workstation maker Silicon Graphics Inc. will cut about 1,000 jobs, or nearly 10% of its work force, in an effort to trim expenses by about $200 million next year, company executives said Tuesday.

The Mountain View-based company also unveiled a plan to reclaim lost business by using Intel Corp. chips in its machines. Silicon Graphics said the job cuts will come through attrition.

“This plan is about a new way of executing our business and reinvigorating our company,” said Chief Executive Richard Belluzzo, a former top Hewlett-Packard Co. executive, at a news conference in New York.

The company’s plans include a spinoff of its MIPS Technologies Inc. chip-making unit, which will now target digital consumer markets such as video games.

Silicon Graphics shares fell $1.25 to close at $14.81 on the New York Stock Exchange.

The company, which has a hiring freeze in place, stressed there would be no layoffs.

Silicon Graphics makes computers with advanced graphics capabilities with uses ranging from simulated nuclear testing to the design of special effects for movies, including the 1993 hit “Jurassic Park.”

But in recent years, the company has lost business to cheaper computers equipped with increasingly sophisticated graphics. Its financial results have fallen short of expectations for several quarters.