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Palm federal has layoffs

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Palm, the maker of the Treo, today warned of lower quarterly revenue and announced belt-tightening including layoffs among its government focused staff.

Palm officials could not be reached for comment so I could not confirm a number of people laid off, but in a press release, the company said that it is “currently implementing several cost-savings initiatives, including reducing its U.S. workforce, consolidating its European operations, and shifting responsibility for Asia Pacific sales, marketing and administrative support to its U.S. offices.”

CNet reported:

With revenue falling to dire levels, Palm may need a Christmas miracle to stay afloat next year.

The latest dose of bad news? Revenue for Palm’s second fiscal quarter, which ended last week, will be just $190 million to $195 million, the company announced Monday ahead of its December 18th conference call. Wall Street analysts had been expecting Palm to record $331 million in revenue, an astonishing 41 percent gap caused by “reduced demand for maturing smartphone and handheld products,” Palm said in a press release.

MarketWatch reported that shares of Palm on Monday slumped 16% to $1.57.

The maker of the Treo line of mobile devices said it now expects fiscal second-quarter revenue to drop from the year-ago period. It’s also seeking to cut costs over the rest of the fiscal year. It aims to reduce operating expenses by 20 percent by the fiscal fourth quarter through U.S. job cuts and the consolidation of European operations. The company forecast revenue of $190 million to $195 million, compared with $349.6 million a year ago, because of “reduced demand for maturing smart phone and handheld products.”

Interesting that they are cutting back in the government market — particularly the federal government market, which many expect to grow — perhaps faster then the consumer market for awhile.

Written by cdorobek

December 1, 2008 at 8:15 PM

Posted in Industry

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