190 Cray employees hosed down with shower of pink slippery

Supercomputer supplier Cray is giving 190 employees the elbow in a restructuring exercise to cut operating costs.

The laid-off folks, some 15 per cent of Cray's 1,312 headcount at the end of last year, will come from all parts of Cray and in all its geographies, some being executives, and the majority let go by July 21.

A number of new hirings will partially offset the layoffs. Aggregate restructuring charges will be around $10m with annualised savings from the shake-up being around $25m. Stifel analyst and MD Aaron Rakers says Cray is investing more in R&D initiatives and customer service and support obligations.

Signs that not all was well in the kingdom of Cray could be found in its financial results for calendar 2016: revenues dropped a little over 13 per cent year-on-year to $629.8m and profit crashed 61 per cent to $10.7m.

At the time, Peter Ungaro, president and CEO, said the top line numbers were "disappointing", and pointed out that while HPC projects could be "lumpy", the entire market was down by a quarter.

"This clearly had a significant impact on our results for the year, despite continued strong win rate in industry-leading market share," Ungaro said.

"Further, the timing of a rebound in our market is uncertain, which has significantly reduced our forward-looking visibility," he added.

Things haven't exactly improved for the supercomputing whizzkid this year either, with sales in Q1 down 44 per cent to $59m and net losses widening to $19.2m from a net loss of $5m in the prior year's comparable quarter.

Ungaro put a brave face on proceedings and claimed Cray was taking market share from rivals.

The latest exercise in pink slippery will enable it to tell investors and analysts it knows what it's doing so don't mark the shares down – too much. ®