San Francisco-based Penguin cut 25 employees last week, leaving 78 at the company, according to a spokeswoman.
A rash of large and small technology companies have been laying off employees since last year because of a sharp drop in demand for technology products worldwide. While nearly all sectors of the technology world have been affected by the slowdown, hardware manufacturers have been particularly hard hit and represent a large number of the layoffs.
In late June, rival VA Linux Systems laid off employees in a major overhaul of its operations. Under the reorganization, VA stopped selling hardware, its mainstay, and cut 153 employees--35 percent of its work force.
Penguin specializes in servers and workstations running the Linux operating system. Sam Ockman founded the company in May 1998. A number of former Dell Computer executives work at Penguin, including Penguin CEO Martin Seyer and marketing and sales executives Tim Diefenthaler and Scott Weinbrandt.