MILPITAS, Calif.-PalmOne Inc.’s stock dropped almost 9 percent following the company’s announcement that it would cut about 100 jobs. The company said the 12-percent reduction in its work force was part of the second phase of its merger with Treo maker Handspring Inc., announced last year.
PalmOne’s stock was trading at about $11 per share after the news.
PalmOne said the job cuts would help it achieve growth and profitability by fiscal-year 2005. The company faces significant challenges in the effort as most analyst firms predict flat growth in PalmOne’s main business of personal digital assistants. Indeed, PalmOne essentially acknowledged such forecasts by promising to shift more investment into its smart-phone effort, spearheaded by the Treo 600 mobile phone/PDA.
“We intend to maintain our lead in the handheld-computer category with new, innovative solutions while we shift more investment toward the higher-growth smart-phone category,” said Todd Bradley, PalmOne’s president and chief executive officer. “The Handspring acquisition continues to deliver synergies, and tough but strategic decisions coupled with operational discipline enable us to reduce overall spending. We are committed to delivering growth and profitability, and these actions will move us closer to those goals.”
After the workforce reduction, PalmOne will have approximately 740 employees.
