Les Crudele, who became CEO of the Santa, Clara, California-based company at the beginning of this month, said Transmeta had a strong intellectual property portfolio. After examining all its lines of businesses, it had decided that IP development and licensing would be its core business activity. We continue to believe that this is the best way for us to deliver our technology to the market and monetize our investments, he said.
Transmeta is also to close its sales and support offices in Taiwan and Japan. Over the next two quarters, as it completes it existing engineering services work, it expects to further reduce its headcount by about 25 to 55 people.
The uncertainty over the final number is because of uncertainty over the level of support required for the Microsoft FlexGo program, which offers pay-as-you-go plans for people who want to own PCs in developing countries. Crudele said they were disappointed at the time it was taking to move from pilot stages to roll-outs in Btazil and India.
Transmeta said the cut-back will result in restructuring charges in the range of $11m to $14m. It will lead to cash expenditures of about $7m to $10m but will result in annual cost savings in the range of $17m to $23m.
With uncertainty over how much its licensing business will generate, Transmeta’s stock fell 13.43% to $0.8917, suggesting it may soon face a battle against delisting.
