Palm sure is having a rough go of it. For all intents and purposes, the company is getting it from both sides as intense competition from Apple eats into its already lagging market share and the economy worsens. This adds up to a lot of pressure on the company’s bottom line, and whenever that happens you know layoffs are not far behind.
Valleywag is reporting that Palm will layoff about 10 percent of its workforce. The company is confirming that the reports of job losses are correct, however it wouldn’t confirm the number. With about 1,000 employees, this would mean about 100 or so will find themselves out of work really soon if the reports are correct.
I can’t see why they would not be. Look at the company’s stock price. It has taken an absolute beating, falling from a September high of around $8.50 a share in September to $2.24 as of the stock market close Friday. That means the company has lost nearly 75% of its market value in just two months.
Secondly, the market share issue. Just using enterprise market share shows how fast Palm has fallen. In February 2007, the company held about 22 percent of the market, according to ChangeWave Research. Now, it holds only five percent. Compare this to Apple. It has gone from no market share to 22 percent in that same period.
Pretty obvious where Apple is getting its newfound marketshare from, isn’t it?
Add to this that the company is currently undergoing some restructuring under new chairman Jon Rubenstein, and the layoffs do make sense. Of course, these are happening at a horrible time, and its going to be tough for folks handed the pink slips to find comparable work.
Bottom line is it has to be done. The company is quite vulnerable right now, and if it does not act quickly, it could find itself in a whole its not going to be able to dig itself out of.
Dear Twitter,
BusinessWeek’s Peter Burrows has a good piece up on 
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