SGI Axes Jobs in New Zealand

SGI New Zealand has paid the price of a new corporate business model with four sales staff, including country manager Peter Vanderbeke, losing their jobs. This is despite performing proportionately better than its Australian counterpart.

In a recent Computerworld report, then SGI New Zealand general manager Vanderbeke said the local business has increased revenue by 30 percent year on year and he did not expect any redundancies among the 20 local staff.

Large account wins in the past year have been the sale of a Vector mainframe to the NIWA -- National Institute of Water and Air -- (one of the largest mainframe sales in the southern hemisphere); 32-processor Origin servers to Peace Software and Auckland University; graphics workstations and servers to WETA; and a professional services engagement with Telecom, he said.

However, the staff cuts are about corporate realignment and the second phase of the new business model, says Australasian managing director Greg Sitters.

He confirms that the New Zealand subsidiary was contributing about 30 percent of Australasian revenue. The normal relationship between New Zealand and Australian subsidiaries of IT multinationals tends to be in the 15 percent to 20 percent range.

SGI will increase its focus on its channel, while retaining direct relationships in large accounts. It will also appoint a distributor.

"Negotiations are at an advanced stage and we should make an announcement by Christmas," Sitters says.

The New Zealand subsidiary has about 15 channel partners currently.

Sitters says the company will introduce over the next six to nine months a new series of products which will be channel-centric.

"We are heavily committed as a key partner in the Linux area and we are seeking further partnerships in the NT space."

NT has been good for SGI in New Zealand, selling ahead of budget.

The subsidiary will be managed out of Australia, with Sitters and other senior management spending one to two weeks a month in New Zealand.

"If we can get a lot more leverage from the channel, this will work," he says.

In March New Zealand's financials were transferred to Australia. "Last (fiscal) year New Zealand made plan, with 30 percent annual growth," says Sitters. "This year, with the cut-backs it will take a 10 percent drop in total revenue."

Last month SGI corporate indicated there would be around 1,500 job losses worldwide as the company sought to save US$300 million. This followed two years of unimpressive revenue growth. In July, the company reported its first profitable quarter in 18 months.

Also in August, CEO Rick Belluzzo suddenly resigned to take up a position with Microsoft Corp.

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