June 14, 2007 2:23 PM PDT
Handheld maker Palm cuts jobs
Evolution of Palm
Jeff Hawkins launches Palm Computing.
U.S. Robotics acquires Palm Computing.
3Com acquires U.S. Robotics, in the process gaining Palm.
Palm is spun off from 3Com as a separate public company.
Palm announces plans to spin off its operating system unit as a separate public company.
Palm announces plans to buy Handspring.
Operating system subsidiary PalmSource is spun off, Palm is renamed PalmOne.
Palm reacquires the rights to make changes to PalmOS from Access.
Palm announces an equity investment from Elevation Partners.
Workers were still in the process of being notified of the cuts Thursday afternoon. Some cuts are being made immediately, while others will take longer to implement, said Palm spokesman Jim Christensen.
"It's a small percentage of our work force," Christensen told News.com, adding that Palm still has openings in some areas. The bulk of the jobs being eliminated are in the U.S. and in Palm's development ranks, though there are some cuts across the company, he said.
Christensen said the move was "not about cost-cutting" but rather about "eliminating some of the hierarchy" at the company.
The move comes less than two weeks after the company announced its plans to sell a stake in the company to Elevation Partners. In the unusual transaction, the venture firm is pouring $325 million into the company, which, at the same time, plans to borrow another $400 million and return more than $900 million in cash to its shareholders. When all is said and done, Palm shareholders will get $9 a share in cash while collectively owning 75 percent of the company, while Elevation will hold a 25 percent stake.
The deal followed months of speculation that Palm might sell itself amid growing competition in the smart-phone market in which its flagship Treo competes. Late last month, Palm also announced plans for the Foleo, a mini-laptop designed as a companion for smart-phone owners that want to do more heavy e-mail editing and Web surfing.