Palm plans further cuts

December 3, 2008 // 1:14 p.m.

Tags: #credit-crunch #garnet #job-losses #palm #palmos #restructuring #treo #windows-mobile #winmo

The bad financial news continues to hit the tech sector with PDA old timer Palm looking to slash costs by twenty percent with some major restructuring.

According to BetaNews, the company is hoping to recoup losses that saw its second quarter revenue drop to $195 million, significantly lower than the company has been expecting.

Palm's chief executive officer Ed Colligan has said that his company is seeing “unprecedented dynamics in the global markets as economic uncertainty hampers demand for consumer products.” He believes that “in order to ensure Palm's long-term success during these uncertain times, [we must take] several steps to significantly reduce our cost structure. These measures will help us navigate this difficult period while launching our next-generation products as planned.

Job losses are expected to form the bulk of the cost-cutting measures, with much of the responsibility for sales in the Asia-Pacific region shifting back to the United States. The company is also looking to concentrate more on its high-end Treo range of products, on which it makes a significantly higher margin.

It's been a tough few years for the company: with its home-grown operating system, PalmOS, declining in popularity when faced with stiff competition from Windows Mobile and its frequently under-powered devices being bested by multiple manufacturers, many saw the decline of Palm as inevitable. When the company bet its future on the Foleo – a proto-netbook that relied on a compatible mobile handset for all its connectivity and storage – many thought the writing was on the wall.

With the company having all but abandoned its PalmOS roots – modern Palm devices are designed around rival Microsoft's Windows Mobile – this “difficult period” could be the straw that broke the camel's back for Palm.

Do you have fond memories of 'beaming' notes to your friends with your PalmPilot, or has the company always played second fiddle to market rivals? Share your thoughts over in the forums.

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