Transmeta lays off staff in cost-cutting effort

Transmeta has posted a lower than expected loss for its second fiscal quarter, and has announced plans to lay off 200 workers.

Transmeta has posted a lower than expected loss for its second fiscal quarter, and has announced plans to lay off 200 workers.

The company has also abandoned plans to offer a version of its Crusoe processor, the TM6000.

Transmeta will continue to improve its existing model, the TM5800 and work with customers to develop "future system-on-a-chip" products, it said in a statement.

For the quarter ending 28 June, the company posted a net loss of $35.6m (£22.6m), or 27 cents per share, on revenue of $7.5m (£4.8m). A year ago, Transmeta lost $69.3m (£43.9m), or 54 cents per share, but revenue was lower than last year's total of $10.5m. The results are based on generally accepted accounting principles (GAAP).

On a pro forma basis, excluding restructuring costs, the company lost $24.7m (£15.6m), or 18 cents a share, Transmeta said. Analysts polled by Thomson Financial/First Call had predicted on average a pro forma loss of 19 cents a share.

The layoffs are expected to reduce the company's operating expenses to around $20m (£12.7m) per quarter by the fourth quarter of 2002. Its operating expenses in the second quarter were $38.8m (£24.5m).

"The actions will help us to streamline the company, while helping us reach our goal of profitability by the fourth quarter of 2003," said Matthew Perry, president and chief executive officer of Transmeta. "We are operating our business as if there will be no upturn in the economy, and planning very conservatively."

Transmeta said it spent $19.1m (£12.1m) on research and development in the second quarter, up from $17m in last year's second quarter.

For the third quarter, Transmeta expects revenue growth of between 0% and 5%. The company will take a one-time restructuring charge of $4m (£2.5m) to $4.5m in the third quarter for the payment of severance and benefits.

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