Citing slowing sales of traditional PDAs as the primary reason, Palm OS device-maker palmOne says it will cut its workforce by about 12 percent and concentrate its energies on smart phone devices. In an attempt to return to profitability by 2005, the company will lay off about 100 employees, dropping its total number of employees to 740, and continue working to integrate Handspring, which the company purchased last year. palmOne recently reported a quarterly loss of $4.1 million, which was less than analysts had feared.
"We intend to maintain our lead in the handheld-computer category with new, innovative solutions while we shift more investment toward the higher-growth smart phone category," Todd Bradley, palmOne president and CEO, said. "The Handspring acquisition continues to deliver synergies, and tough but strategic decisions coupled with operational discipline enable us to reduce overall spending. We are committed to delivering growth and profitability, and these actions will move us closer to those goals."
Although palmOne's products are still the best-selling PDAs, the company is meeting increasing competition from major players in the Pocket PC camp, such as HP and Dell. Because customers are increasingly looking for connected PDAs and smart phones, palmOne purchased Handspring in October, primarily for Handspring's Treo smart phone product line. palmOne currently sells the Treo 600 and will soon offer an updated model, the Treo 610, directly to consumers and through major cell phone carriers.