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Palm last night said it will rid itself of 250 staff, part of the fallout of the Be acquisition, but sought to sugar the pill for its remaining employees by stressing that its Q2 revenue is on course to fall between $250 million and $280 million.

That's not much to crow about, however, since that range is simply within the forecast Palm had already made. Doubly so, since the company is still expecting to post a loss for the quarter, of around seven cents a share, in line with Wall Street expectations.

Palm's second quarter end tomorrow, 30 November. It will report its results on 19 December.

Q2's figures are within the parameters of Palm's recovery plan, instituted more than six months ago by a CEO no longer working for the company. Which may say much about how much faith former chief Carl Yankowski had in its success.

However, interim CEO Eric Benhamou, who ran Palm while he was head of 3Com, the company's former parent, was bullish. "Palm is executing better than a few months ago in both of our core businesses," he said. "And we are now in a position to further reduce our cost structure. Together, these favourable factors will accelerate our return to profitability."

'Further reduce our cost structure'? That won't be welcome news to staff in the light of this week's job cuts. Palm did say it was planning to hire "additional people with skill sets to match the future needs of Palm's Solutions and Platform Solutions groups", but it seems they will offset today's cuts to bring the total number of staff sent pink slips down to 250. So much for the skills Be's staff brought to the company, only 45 of whom will be added to Palm's payroll.

The workers given pink slips this week include employees and contractors. Palm didn't specify how many of each.

Palm said it was on course to spin off its Platform Solutions Group - the team that develops the Palm OS - by the end of calendar 2001. ®

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