Transmeta posts $18.7M Q1 loss, moves ahead with job cuts

By Colleen Taylor, Contributing Editor -- Electronic News, 5/11/2007

The financial losses only got worse during Q1 for long-troubled Transmeta Corp., which, in turn, is continuing with planned job cuts. 

The Santa Clara, Calif.-based company on Thursday posted a Q1 financial report with a net loss of $18.7 million, down from Q4's net loss of $15.9 million and Q1 2006's net loss of $1.6 million.

Transmeta reported Q1 revenues of $2.1 million, down from Q4's $2.39 million in revenues and Q1 2006's $19.5 million in revenues. 

The dismal results are nothing new. Indeed, the company has been rife with troubles for some time now. Transmeta suffered a host of financial woes throughout 2006, reporting quarter after quarter of slumping profits, and saw former CFO Mark Kent resign in May. In January, chip making giant Intel Corp. hit Transmeta with a patent infringement suit in response to a similar suit filed by Transmeta in October 2006. Also in January, Transmeta's board voted to replace then-CEO Arthur Swift with Les Crudele in a move to head the company with an exec who had "more operational experience."

Days after Crudele's appointment became effective in February, the company cut 39 percent of its workforce and launched a plan to focus entirely on intellectual property licensing in an attempt to regain profitability. The cuts affected more than just Transmeta's engineers; as of March 31, the company's restructuring plan had also effectively eliminated the management positions of at least four of the company's executive officers: Patrick V. Boudreau, senior VP of human resources; David R. Ditzel, CTO; Martin A. Levy, VP of operations; and Robert Rogenmoser, VP of VLSI development.

More job cuts are on the way for Transmeta, which currently has just 65 employees. Following Q1's dismal financial performance, Transmeta said it still expects to go ahead with plans announced last month to further reduce its headcount by 15 percent to 20 percent during Q2.

The majority of the cuts will affect general and administrative positions, the company said, completing its transition to a purely IP licensing company. Previously, Transmeta had engineering services as a separate line of business and also sold microprocessor products.