Axe to fall on Palm employees

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Palm has confirmed that it has started culling staff against the backdrop of stiff market competition.

As the smartphone maker loses market share to rivals Apple and RIM, the axe has fallen on some employees with more still yet to feel the blow.

Spokeswoman Lynn Fox said the layoffs began last week, but she declined to say how many jobs would be cut.

Palm, which employs 1,050 workers, makes the Centro and Treo smartphones. The company's market share has been shrinking, with RIM's BlackBerry becoming the device of choice for the business set and Apple's iPhone a consumer phenomenon.

"The goal is to consolidate resources and focus our efforts more effectively," Fox said.

Palm has been staking its future on the launch of a yet-to-be-named operating system (OS) and device. Fox said the OS is on track to be released this year, and the device in the first half of 2009.

The company has hired top talent as it tries to right itself, poaching both chairman John Rubinstein, who helped create the iPod, and senior vice president of product development Mike Bell from Apple.

But the smartphone market seems to grow more competitive by the day. News of Palm's layoffs emerged as hundreds of people lined up at stores on Friday to buy the BlackBerry Storm, the first touch-screen phone from RIM.

According to data released Thursday by ChangeWave, only five per cent of companies plan to buy a Palm smartphone in the next quarter, half the figure from a year ago. By contrast, more than three quarters (78 per cent) of corporations planned to buy a RIM device and 22 per cent an iPhone.

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