Palm to Cut 250 Jobs

Palm Inc. on Wednesday announced that it is laying off 250 employees, the latest in a series of cutbacks for the handheld computer and operating system company.

Layoffs will come from information technology, finance and human resources according to officials at the Santa Clara, Calif., company.

The cutbacks follow the ousting of CEO Carl Yankowski at the beginning of November, and the announcement earlier in the week that Palm is ceasing operations of its MyPalm portal services.

Yankowski has been blamed several for missteps at the company this year, including the early announcement of the Palm 505, which led to a glut in inventory of previous products. Under his direction, Plam was also unable to release a long-awaited wireless device by the end of the year. That device, which combines the always-on e-mail access of Reasearch In Motion Ltd.s Blackberry with wireless Internet and general personal information functions, is due out by the end of next January, according to sources close to the company.

The company reported Wednesday that it expects to report revenue of between $250 million and $280 million for its fiscal second quarter, which ends Nov. 30, 2001; this meets prior guidance. The company expects a pro forma loss of seven cents per share for the same quarter.

“We are pleased to report an improvement in our revenue outlook,” said Eric Benhamou, Palms chairman of the board and its temporary chief executive officer until the board finds a replacement for Yankowski.

“Palm is executing better than a few months ago in both of our core businesses,” Benhamou said in a statement, referring to the hardware and operating system businesses. “And we are now in a position to further reduce our cost structure. Together, these favorable factors will accelerate our return to profitability.”

Todd Bradley, COO of Palm who joined the company in June, is rumored to be the likely choice for Yankowskis successor, but the company has made no announcements.