PortalPlayer Lays Off 45 on iPod Loss

Staff Reporter -- Electronic News, 6/9/2006

PortalPlayer Inc. has cut 45 positions from workforce in an effort to save $6 million to $7 million annually.

The 14 percent staff cut will mainly affect staff here in the United States and comes after the personal media player-focused company announced in April that its chips would not be used in the next-generation of Apple iPods. Until then, PortalPlayer had derived 90 percent of its revenue from its iPod business.

"In light of the product transition setback we announced on April 19, we conducted an in-depth internal review of the company's strategy and engineering investments," said Gary Johnson, president and CEO of PortalPlayer, in a statement today.

"As a result, we have re-organized our operations to focus on our key initiatives: continuing to compete for new design wins with our largest customer and supporting them with current designs; marketing our existing products and super-integrated, single-chip product roadmap to a broader customer base; successfully launching our Preface technology platform targeting secondary displays on notebook computers; and developing highly integrated wireless solutions," he continued.

The cut will result in Q2 special charges in the range of $850,000 to $950,000.