SAN FRANCISCO: Struggling smartphone maker Palm Inc said that it is cutting its workforce, a move the company takes as it loses market share to
rivals Apple Inc and Research in Motion Ltd.
Spokeswoman Lynn Fox said the layoffs began this week, but she declined to say how many jobs would be cut.
Palm, which employs 1,050 workers, makes the Centro and Treo smartphones. The company's marketshare has been shrinking, with RIM's BlackBerry becoming the device of choice for the business set and Apple's iPhone a consumer phenomenon.
"The goal is to consolidate resources and focus our efforts more effectively," Fox said.
Palm has been staking its future on the launch of a yet-to-be-named operating system and device. Fox said the OS is on track to be released this year, and the device in the second half of 2009.
The company has hired top talent as it tries to right itself, poaching both chairman John Rubinstein, who helped create the iPod, and senior vice president of product development Mike Bell from Apple.
But the smartphone market seems to grow more competitive by the day. News of Palm's layoffs emerged as hundreds of people lined up at stores on Friday to buy the BlackBerry’s new touchscreen phone Storm.
According to data released by ChangeWave, only 5 per cent of companies plan to buy a Palm smartphone in the next quarter, half the figure from a year ago. By contrast, 78 per cent of corporations planned to buy a RIM device and 22 per cent an iPhone.
Last week, Goldman Sachs initiated coverage on Palm with a sell rating, citing increasing competition and marketshare losses.
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