Palm has announced plans to cut US staffing levels and reorganise its global workforce after posting quarterly results that fell well below expectations.
The company has not specified the total number of layoffs, but the losses are likely to be heavy as Palm looks to save $20m (£13m) in costs by the next quarter.
Palm is closing its Asian operations and moving responsibility for the sector to the US, and is consolidating its European offices.
"We are seeing unprecedented dynamics in the global markets as economic uncertainty hampers demand for consumer products," said Ed Colligan, Palm's president and chief executive.
"In order to ensure long-term success during these uncertain times, we are taking several steps to significantly reduce our cost structure. These measures will help us navigate this difficult period while launching our next-generation products as planned."
Overall revenue was down to $190m to $195m (£129m to £132m), almost half last year's total. Palm's share price plunged by over 10 per cent as the news broke.
Once the undisputed leader in handheld computing, Palm is facing an increasingly tough market. RIM's BlackBerry is the brand of choice for the business market, and Apple's iPhone and Google's Android are taking large chunks of the consumer market.
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