Transmeta to cut 200 as losses deepen
The chip designer reports a second-quarter loss of $25.2 million, or 19 cents per share, and announces its will lay off 40 percent of its work force.
The Santa Clara, Calif.-based company reported that it lost $25.2 million, or 19 cents per share, on revenue of $7.5 million for the second quarter, ended June 28. For the same quarter last year, the company lost $17.8 million, or 14 cents a share, on $10.5 million in revenue.
The crucial difference between 2001 and 2002, however, is that Transmeta's revenue at this time last year was relatively buoyant. In second quarter 2001, the company was able to boast of an increasing list of customers that promised to incorporate the company's Crusoe processors, which consume far less energy than standard PC processors, into notebooks.
Since then, product delays, a large number of executive changes, competition from Intel and a slow market have led to lower revenue and larger losses for the chip designer.
Transmeta's goal now is to achieve profitability in 2003. To get back on track, the company said it would try to lower operating expenses to $20 million per quarter staring in the fourth quarter. Right now, its operating expenses are just over $27.9 million.
Transmeta also announced that it is discontinuing its TM6000 chip, which was designed for consumer electronics devices. It will instead concentrate mostly on the TM5800, a chip that was originally due for release in the late spring of 2001 but didn't arrive in volume until this year. The delays surrounding the TM5800 precipitated many of the company's problems, according to analysts.
"We planned the restructuring very carefully, balancing Transmeta's need to achieve operating efficiency with the ability to preserve the resources necessary to maintain and enhance our technological innovation, product excellence and customer service," said Matthew Perry, Transmeta's CEO.