General Magic said it cut 28.6 percent of its work force, bringing its total employment to 200 regular and contract workers.
General Magic has been battered by a series of setbacks this year. AT&T reduced its ties to the company and Sony killed its plans to make a handheld computer using the company's Magic Cap operating system.
The company, which last month underwent a management shakeup by pushing out its chief executive and president, reported a loss of $12.4 million, or 48 cents a share, for the quarter ending September 30, compared with a loss of $11.6 million, or 45 cents per share, a year ago.
However, General Magic said it would have posted a smaller loss of $10.9 million, or 42 cents a share, without its one-time charges for technology acquisitions.
Revenues, meanwhile, also dropped to $800,000 for the quarter, down from $1.1 million a year ago. The declining revenues were attributed to lower license fees as the company shifted to Internet standards for its products. General Magic's current strategy is to transform itself into an Internet company.
The outlook does not get better for the fourth quarter. The company expects to report a charge of $2 million to $4 million relating to its work force reduction.
The new round of changes at the company come just a month after Steve Markman, a former Novell vice president, was named chief executive. He took the helm after General Magic cofounder and CEO Marc Porat and its president Robert Kelsch resigned.