Palm will experience layoffs soon, according to an unconfirmed report. Palm is beginning a round of layoffs that may number in the hundreds.
While no official confirmation is available at this time, Palm Infocenter is citing reliable sources described as "ex-employees" having said that the layoffs are worldwide, and may total hundreds of employees.
Today's report goes on to state that employees are already being notified, and a formal announcement could be made later this week.
Palm has confirmed that it has laid off some employees, and it released the following statement on this issue:
Palm is working to sharpen its focus and better align resources behind core initiatives that will make the greatest impact to our business. To this end, and to ensure that our expenses are in line with projected revenues, we have made some reassignments and reductions in staff. This will better enable us to compete most effectively and ensure our long-term success.
A difficult time
This news follows the recent announcement of Palm's worst quarter in years, with revenue coming in $25-30 million dollars below expectations. The preliminary report of this, which came after normal trading hours on December 6, caused a roughly 15% drop in Palm stock overnight. This will be the second straight quarter of losses for Palm.
Investor jitters are likely worsened by the fact that as part of its transaction with investment firm Elevation Partners this fall, Palm issued a one-time payment to shareholders that forced it to trade its roughly $600 million in cash for $400 million dollars in debt.
As part of this, the company is undergoing a top-level management change, with Jon Rubinstein taking over as chairman and several new board members from Elevation Partners coming in. A company shakeup accompanying this may account for the layoffs that are rumored today.