By Ian Fried, 15 June 2007 08:52
NEWS
Days after announcing plans to sell a stake in the company to a venture capital firm, handheld maker Palm has cut an unspecified number of jobs.
Workers were still in the process of being notified of the cuts yesterday afternoon. Some cuts are being made immediately, while others will take longer to implement, said a Palm spokesman.
He said: "It's a small percentage of our workforce," adding that Palm still has openings in some areas. The bulk of the jobs being eliminated are in the US and in Palm's development ranks, though there are some cuts across the company, according to the spokesman.
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He 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 $325m into Palm, which, at the same time, plans to borrow another $400m and return more than $900m in cash to its shareholders.
When all is said and done, Palm shareholders will get $9 per share in cash while collectively owning 75 per cent of the company, while Elevation will hold a 25 per cent 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 email editing and web surfing.
Ina Fried writes for CNET News.com
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