VA Linux ( LNUX) was down 20.6% but still off its intraday low of $2.38.

The company said late Wednesday it was exiting the hardware business to concentrate on Linux operating system applications, eliminating 153 jobs or 35% of its workforce.

The company said revenue would "significantly decline" as a result of the strategy, which would reduce operating expenses.

The company posted much wider third-quarter loss last month compared to a year ago on revenue that dropped 41%. Analysts said at that time that the company's cash burn rate would not allow it to reach its goal of profitability by October 2002.

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