PalmOne Announces Layoffs

PalmOne said it's laying off 12% of its workforce in an effort to get back in the black in its fiscal year 2005, which begins in June. The gadget maker also plans to focus more of its sales efforts on so-called smart phones, which are growing faster than the PDAs (personal digital assistants) that have historically been its stock-in-trade.

After the layoffs, which entails letting go 100 workers, palmOne will be left with about 740 employees.

On the smart-phone side, the company already got a big leg up with its October 2003 acquisition of Handspring, maker of the popular Treo 600 line that offers both PDA functions and phone capabilities.

"The Handspring acquisition continues to deliver synergies, and tough but strategic decisions coupled with operational discipline enable us to reduce overall spending," said palmOne CEO Todd Bradley. "We are committed to delivering growth and profitability, and these actions will move us closer to those goals."

In palmOne's brief history as a combined company, its investors have been hard to impress so far. They knocked as much as 20% off the value of the shares in intraday trading in December, when palmOne reported earnings for the first time and issued guidance that was much weaker than expected.

In Wednesday trading, which saw broad-based tech selling, palmOne stock was down $1.21, or 10.1%, to $10.85 as of 11:15 a.m. EST.