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Palm lays off 19 percent of employees

The handheld company lets go about 200 workers during the current quarter across both its hardware and operating system businesses.

Palm has laid off about 200 employees, with at least half of those workers being let go Thursday.

The Milpitas, Calif.-based company confirmed late Thursday that it had let the workers go over the course of its third fiscal quarter, which ends Friday. The work force reduction leaves the company with about 1,300 total employees and contractors in its hardware division, Palm Solutions Group, and its operating system subsidiary, PalmSource.

The move was done in reaction to market conditions, according to Palm spokeswoman Marlene Somsak.

The cuts come amid a slump in the handheld industry; shipments in 2002 dipped about 9 percent to 12.1 million units, compared with 2001, according to Dataquest, a unit of research firm Gartner.

More than half of the effected employees were notified and left Thursday. They will receive at least three months severance, Somsak added.

PalmSource, set to be spun off from Palm in the first half of this year, let go 18 percent of its employees earlier this month. At that time, PalmSource would not say how many employees were let go or how many remained at the Sunnyvale, Calif.-based company. Palm confirmed Thursday that those employees are part of the 200 or so laid off.

Glenn Cross, a corporate vice president, was among the employees whose position was eliminated. Cross joined the company in late September 2001 from Sun Microsystems.