GOVERNMENT

Cray plans to lay off 65 employees, or about 8 percent of its workforce, by the end of March 2006, the company said in a document filed Wednesday with the US SEC. The company told its staff about the plan on Monday. The reductions are expected to save Cray $7 million annually, though severance benefits, legal fees and other costs related to the restructuring could cost between $500,000 and $3 million. The news is not surprising, given Cray’s recent results. The company posted a $10.3 million loss on sales of $44.7 million for the quarter ending in September. In November, chief scientist Burton Smith resigned from Cray to take a job at Microsoft (see Burton Smith Resigns From Cray). "We do not anticipate that these actions will have a material impact on our current plans for our products, our support of customers, or our planned future development programs,” the company said in the SEC document. "However, there is risk that the impact could negatively affect product development, customer service and sales. Additionally we may not achieve the estimated savings or may under-estimate the restructuring costs." Cray is a long way from its once-dominant position in government and other supercomputing markets. Seymour Cray began his company in 1972 in Chippewa Falls, Wisconsin. The company grew to dominate the supercomputing landscape with its ultra-fast architecture called vector processing.