Tought Times For Transmeta - 200 Employees To Be Let Go

Tansmeta announced that it will lay off 200 people or 40% of its current work force as losses countine to mount.

Transmeta 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 problem is that between 2001 and 2002, Transmeta's revenue was relatively buyant. The biggest difference perhaps was that in Q2 of 2001 Transmeta was announcing a long list of clients/OEMs that were going to produce products using the Transmeta processors.

Many product delays and many management changes coupled with competition from Intel and AMD have led to lower sales and larger losses.

Transmeta has announced an agressive round of cost cutting measures that should lower operating expenses in an attempt to achieve profitability in 2003.

Possible good news for Transmeta is that Microsoft continues to talk about tablet PC technology and some OEMs may in fact incorporate Transmeta processors into those designs.

Sounds like a rough road ahead, but competition is good and it would be a shame to see Transmeta disappear.