August 13, 2001

Penguin Computing restructures, lays off 25%

Author: JT Smith

- by Tina Gasperson -
Penguin Computing has laid off about 25% of its staff across the board, according to Scott Weinbrandt, vice president of sales and marketing at the San Francisco Linux solutions seller. "We are going through restructuring to support our business model," says Weinbrandt.As of last Friday, the company laid off 25 people in an effort, says Weinbrandt, to refine its operations and stay true to the company vision to provide built-to-order Linux-based servers, and to provide customized software configurations for the Web, for applications, and for database servers. Weinbrandt claims that the company is growing, despite the cutbacks.

Penguin recently announced a partnership with Scyld Computing Corporation, using Scyld's Beowulf Cluster OS, in which the Linux-based distribution is placed on Penguin's custom hardware configurations. Tom Quinn, the director of operations at Scyld, says there's an informal relationship whereby Penguin is "bidding and selling systems with our product. They provide integration and support." Quinn was unaware of the layoffs at Penguin. "They've been very active lately," he says.

Penguin wants to increase its focus on custom applications, and according to Weinbrandt, is completing the second phase of moving out of the server manufacturing business. Instead of putting the machines together in-house, the company is outsourcing the manufacturing to NexTrend Technology, an OEM-services company based in Fremont, California. "We started this transition 12 months back," says Weinbrandt. "But we are definitely still in the hardware business."

Weinbrandt says that by the end of this month, Penguin should be releasing at least one or two new Intel-based hardware configurations. He sounds optimistic about the future of the company, but refused to comment in response to a question about whether Penguin Computing executives had been asked to take pay cuts as part of the company's refining and restructuring.


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