Dennis McKenna, SGI's chairman and CEO, speaks with Computerworld about the company's Chapter 11 filing and its financial reorganization plan.
Why did you file for Chapter 11 protection?
The company had accumulated legacy costs over the years, and as we explored options to fix those issues, this became the option that could provide the quickest and best relief in order for the company to move forward with its new business model.
Have you started speaking to your customers about the filing?
We have. We gave them an explanation about what it means for the welfare of the company and its ability to move forward and to support them in the short term and longer term as a continued supplier. The one clear message is, we're glad that there is a level of certainty on the future of SGI. It's been that uncertainty that has really had an impact, despite having a new management team and strategies.
What's the basis for that level of certainty?
You had a 12 percent layoff in March, and you're under intense competition from vendors selling x86-based Linux supercomputers. We have a new management team in place. We've realigned our organization to improve our ability to execute.
We've defined a new business model, and we removed legacy cost structures. And we have a balance sheet that will be fixed through this [bankruptcy] process. This is a stable foundation for us to move forward; the company has not had that for some time.
Will customers see any changes in service and support as a result of the bankruptcy filing?
None whatsoever. In fact, we realigned our sales and services organization so it would be more efficient and productive.
Are you planning any additional cutbacks?
No more than what we have already announced.