SGI's CEO resigns, board member takes helm

Silicon Graphics (SGI) has announced the resignation of Richard Belluzzo as chairman and chief executive officer. The company said Robert Bishop, a current board member, will replace him.

The move comes at a tumultuous time for SGI and closely follows the announcement of a wide-scale reorganisation of the company that will lead to about 1500 job cuts globally and the creation of several new units. SGI has about 9300 employees worldwide.

Belluzzo, who was named CEO in January 1998, has resigned "to accept a position with a business that is not competitive with SGI", the company said. A company spokeswoman said she did not know where Belluzzo was headed.

Bishop, who directed SGI's global sales unit until 1995, said he is looking forward to taking the helm at a time when the company's reorganisation goes into effect.

"Having participated in the formation of our new strategy, I am fully committed to the next phase of SGI's transformation that positions the company for sustained growth and profitability," Bishop said.

Bishop's sales and marketing experience played a role in his selection, said James McDivitt, an SGI board member. "Bob brings substantial experience to the position, having built and managed several worldwide sales and marketing organisations at SGI, Apollo Computer, and Digital during his 35-year career," McDivitt said in a prepared statement.

SGI sells a broad range of high-performance computing and advanced graphics products. In its reorganisation announcement, SGI said it would create a new unit for its Cray Research supercomputer business, establish a division to handle its Visual Workstation line and sign several partnership deals.

Speaking to reporters in a conference call hours after accepting the position, Bishop said SGI still has to execute the turnaround plan announced earlier this month. "That's where we have some room for involvement and fine-tuning," he said.

The new strategy calls for narrowing SGI's focus to its server and visual computing units, entering the broadband Internet market, spinning off its NT and Cray supercomputer units and embracing the Linux operating system.

Bishop insisted he's not grooming the Mountain View, Calif., company for an acquisition and that he's committed for the long term.

William Kelly, senior vice president of corporate operations, said the company chose a successor quickly because "it was important to preserve the momentum that we have. The company could not afford an extended period of interim leadership," he said, pointing as an example to rival Compaq Computer Corp., which went through an extensive search for a new CEO before choosing an insider for the job.

Some observers said putting a new leader at the helm quickly was imperative. "It was important for SGI not to go into a period where they would lose talent because of being leaderless. Belluzzo didn't give them any other alternative," said Philip Rueppel, analyst at Deutsche Banc Alex. Brown in San Francisco.

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