The Buzz: December 3, 2001

IBM and Palm were among the latest tech companies last week to announce layoffs.

IBM and Palm Call for Layoffs

The beat goes on.

IBM and Palm were among the latest tech companies last week to announce layoffs.

IBM said it will cut 1,000 jobs at several chip manufacturing, storage and development plants, the result of sluggish sales and falling revenue tied to the ongoing industrywide slowdown.

In October, IBM said microelectronics sales had dropped 30 percent from a year earlier.

Also last week, Palm said it will lay off 250 employees in IT, finance and human resources.

The job cuts were the latest in a series of cost control measures at Palm, which recently ousted CEO Carl Yankowski and stopped operations of its MyPalm portal services.

Carriers Scrub Net Access Plan

A Boeing-led initiative to give air passengers high-speed Internet access while in flight was dealt a serious blow last week when the three major airlines backing the project—American Airlines, Delta Air Lines and United Airlines—dumped the plan.

The pulled financial support for Boeings Connexion, which was expected to be under way in the middle of next year, is another ripple effect from the Sept. 11 terrorist attacks, which financially crippled the airlines and shifted the focus to safety and security.

Boeing is still pushing forward with the plan, which would enable passengers to connect their own devices—such as laptops—to the two-way broadband service through a satellite link, giving them access to the Internet, e-mail and corporate intranets.

Boeing still plans to test Connexion on Lufthansa passenger jets next year or in 2003.

Bush Extends Tax Moratorium

President Bush last week gave online shoppers another break from the threat of Internet taxes.

Bush signed legislation that continued for two more years a moratorium that Congress put in place in 1998 in hopes of spurring growth of the Internet.

The president said the moratorium was especially important during the holiday season.

"The bill will protect American consumers from an unwanted tax surprise when they purchase gifts online for friends and family," Bush said in a statement.