Palm to cut jobs as competition heats up

Palm intends to cut jobs as the company struggles to compete in the increasingly aggressive smartphone market.

A Palm spokesperson has told Reuters that a round of layoffs began last week, but she declined to specify how many jobs would be cut. The company currently employs 1,050 workers.

Palm has been steadily losing market share to RIM and Apple, and the situation isn't likely to improve anytime soon - according to market research firm ChangeWave, only 5% of companies plan to buy a Palm smartphone next quarter, compared to the 78% planning to buy a RIM device and 22% planning to buy an iPhone.

In an effort to remedy this situation the company plans to launch a new smartphone OS this year, and a new device in the first half of 2009.

Palm posted a $21.8 million operating loss in the company's most recent balance sheet, for the three months ending August 31.

The company's revenues had increased slightly year-on-year, reaching $366.8 million, but gross profit from revenue fell to $97 million.

Since then, Palm has had to contend with the introduction of new competition, including the launch of RIM's Blackberry Storm and the first Google Android-powered handset.