Palm plans to lay off more workers later this month, its second cutback in recent weeks.
The cuts are partially due to the late shipping of its latest range of PDAs (personal digital assistants).
The news has fuelled rumours that Palm may be ripe for acquisition. Potential suitors include Apple, Sony and IBM. Apple CEO Steve Jobs made an attempt to buy Palm from parent company 3Com three years ago on his return to Apple.
Timing The layoffs are "not any kind of restating of expectations", said Palm spokeswoman Marlene Somsak. She added that the disclosure of the upcoming cuts "was not anything like a pre-announcement" of results for the company's fiscal fourth-quarter, which ends today.
Delays Somsak said the reason for the layoffs was Palm's poor performance in its third quarter, ended March 2. This was caused, at least in part, by the delay in shipping m500 series devices. In the softening economy, she said, customers delayed purchases to wait for the next upgrade. When it was late, inventory for Palm's older devices backed up, while the new model wasn't yet on the market.
According to Friday's announcement: "The company expects to provide more information about this workforce reduction when it announces fourth-quarter results during the week of June 25."
The m500 devices are now available, and Palm CEO Carl Yankowski said efforts to improve the company's execution in engineering, manufacturing and logistics "are beginning to show results". Palm noted that the new layoffs are needed to bring its internal costs "in line with business conditions".
In April, Palm said it would cut its workforce by 13 per cent, or about 250 employees and contractors, and make other cutbacks in response to a reduced revenue outlook and an expected fiscal fourth-quarter loss. The company revealed yesterday that about 300 people were actually let go in the first round of layoffs.