Is Palm (PALM) Pre Not Living Up To Expectations?

This morning Crunchgear circulated a rumor that Palm (Nasdaq: PALM) is laying off employees and it is speculating that Palm is laying off individuals who work on the Windows Mobile team.

Also, the website says it's alarming how quickly Palm has dropped the price of its new and innovative Palm Pre. The estimated sales for the Pre topped out at 375,000 at the end of August and Palm reduced the price from $299 ($199 after rebate) to about $79 in about eleven weeks.

Crunchgear said, "While this (the price drop) might be normal for a feature phone – the subsidy kicks in once they’re sure that the early adopters who simply must have the LG Chocolate have had their fix – this isn’t good for a smartphone that was supposed to be the lead invasion force for a new WebOS smartphone renaissance."