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Palm plans to lay off employees to lower its expenses

Palm Inc, which lowered sales forecasts two weeks ago, plans to fire more workers to reduce expenses as the biggest maker of handheld computers copes with a slump in demand.

Palm will give details when it reports earnings the week of June 25, the company said in a statement. Palm already has fired 300 people, more than the 250 job cuts announced in March. Palm also named former Gateway Inc. executive Todd Bradley, 42, as chief operating officer of the unit responsible for its devices.

Sales have fallen as Palm struggles with forecasting demand and introducing new products. The Santa Clara, California, company cut sales forecasts on May 17 and said it expected a wider fiscal fourth-quarter loss. Customers didn't buy older products while waiting for the new m500 and m505 devices, which were delayed because of defects, Palm said at the time.

"It's positive that they can attract new talent still, given where their stock is and the troubles they've been through," said Tom Sepenzis, an analyst with CIBC World Markets. "Management execution has been one of the biggest problems." Palm shares rose US$0.56, or 10 percent, to US$6.19 on Friday. The stock has dropped 78 percent this year.

The m500 line is now selling well, the company said.

Bradley replaces Satjiv Chahil, who remains chief marketing officer. Bradley was executive vice president for global operations at PC maker Gateway until January, when he and other senior executives were fired after company founder and Chairman Ted Waitt took back the chief executive's job.
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