VA Linux misses analysts' mark, cuts 140 staff

VA Linux Systems Inc. accompanied disappointing second-quarter financial results Tuesday with the news that it would reduce its workforce by 25 percent.

VA Linux builds servers for corporate customers using the Linux operating system and has suffered from a continuing assault in the financial markets. This condition likely won't be helped by its second-quarter loss of US$0.28 per share. Analyst polled by First Call/Thomson Financial had predicted the vendor would lose $0.26 per share for the period.

While the company increased revenues 111 percent year-over-year, to US$42.5 million, it suffered from an economic slowdown that has haunted tech companies in recent months. In order to recoup some of its loss, VA Linux will lay off 25 percent of its workforce, or close to 140 employees, the company said.

Shares of VA Linux (LNUX) fell 6.5 percent during Tuesday's trading on the Nasdaq exchange, dropping $0.50 to $7.25.

VA Linux Systems, in Fremont, California, is at +1-408-542-8600, or at http://www.valinux.com/.

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