Embedded Linux specialist Lineo is getting rid of over half of its staff, through a mix of redundancies and reassignment to "peripheral" projects the company hopes to sell or spin off.

Sixty staff will be sent pink slips. Another hundred are left wondering when they will leave the company. Some 110 workers will be retained to work on Embedix and RTXC, Lineo's two core OS products.

"From its inception, Lineo's core business has been the development of embedded operating systems and tools,” said Lineo's chairman and CEO, Bryan Sparks. "In anticipation of a growth year for the technology market, Lineo spent the past 18 months adding peripheral services, stacks and solutions - even hardware solutions - to our offerings."

The anticipated market growth hasn't happened, and Lineo's left with projects that aren't central to its OS business. Time then, says Sparks, to put them aside.

With hi-tech stocks in general and Linux ones in particular in the doldrums, Lineo was unable to secure sufficient financing. A $20 million cash injection made last month by investors including Hitachi and Sun will keep the company going. ®