July 19, 2001 12:35 PM PDT

Linux company Lineo lays off 13 percent

Lineo, a company working to get its version of Linux established in devices such as set-top boxes and handheld computers, laid off about 40 employees Friday, citing slower-than-expected revenue growth.

The cut, about 13 percent of Lineo's staff, affected all divisions of the company, said spokesman Lyle Ball. Ball, a Lineo co-founder, is exchanging his job at the company for an equivalent position at a newly established public relations company that will contract with Lineo. Also leaving the communications staff is Blake Stowell, who has taken a job at rival Microsoft coordinating Windows XP public relations, Ball said.

"When we (made) projections for last quarter, we projected it would do better than it did," Ball said.

The quarter ended June 30, though, was Lineo's best ever, measured by revenue. Ball declined to offers specifics but said the company's work in "embedded" Linux software for a variety of special-purpose computing devices exceeded that of any rival--including the overall Linux leader, Red Hat. Red Hat reported $4.6 million in embedded Linux revenue in its most recent quarter.

The slowing economy has been tough on Linux companies. Lineo rival MontaVista Software cut 20 percent of its staff recently. LynuxWorks, another rival, withdrew its IPO plans in June, five months after Lineo made the same move.

Lineo's recent deals include an agreement to have its software used in Sharp Electronics' Zaurus handheld computer. Sharp has committed to shipments of 1 million units by March 2002, Ball said.


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