MANHASSET, N.Y. Transmeta Corp. cut 67 employees from its global workforce Thursday (March 31), and the troubled processor company named Arthur Swift its new president and chief executive.
Transmeta (Santa Clara, Calif.) announced the layoff as part of a restructuring plan to focus on more profitable processors and continue growing its IP-based business model. The company will now have 208 employees worldwide.
Transmeta said it now expects a negative cash flow of $16 million in the first quarter of 2005, and will record a $6 million restructuring charge for severance and termination costs.
Changes to Transmeta's product line include providing its Crusoe and 130-nm Efficeon processors on an end-of-life basis only. It will also manufacture select versions of its 90-nm Efficeon processors for critical customers under modified terms and conditions.
The moves are in line with Swift's strategy of growing the company's IP business. Employed by Transmeta since March 2003 as senior vice president of marketing, he has been instrumental in developing Transmeta's licensing and service business, which grew from $1.1 million in 2003 to $10.7 million in 2004. Swift has helped Transmeta license its advanced LongRun2 technologies to NEC Electronics, Fujitsu Ltd. and Sony.
A 25-year industry veteran, Swift previously served as vice president and general manager at Cirrus Logic, as well as vice president of marketing for Sun Microsystems, where he managed the company's semiconductor division and Sparc microprocessors.
Whether Swift can pump life back into the company as it transitions its business model into an IP services supplier remains unclear. Transmeta has apparently chosen that direction after coming up short in its efforts to compete with industry leaders Intel Corp. and AMD.
Despite growth in IP services, Transmeta continues to lose money, having posted a net loss of $28.1 million, or 15 cents per share on revenue of $11.2 million in the fourth quarter of 2004. Its 2004 losses totaled $106.8 million, or 61 cents per share on sales of $29.4 million.
In a separate announcement Thursday, Transmeta entered a strategic alliance with Sony Corp. and Sony Computer Entertainment, agreeing to provide engineering services to Sony to accelerate its adoption of Transmeta's LongRun 2 technologies for products such as cell derivatives.
The agreement also called for strategic technology collaborations in other engineering areas.