3Com plans to cut 3,000 more jobs

The Associated Press
Tuesday May 08, 2001

SANTA CLARA — Beleaguered network equipment maker 3Com Corp. plans to cut another 3,000 jobs, or nearly a third of its work force, in its quest to return to profitability, the company said Monday. 

The latest reduction comes less than three months after 3Com let go 1,200 full-time and contract workers.  

In all, the company has shed more than 40 percent of its work force this year in an effort to save $1 billion annually. 

“This announcement is a necessary step in our plan to restore profitability,” said 3Com chief executive Bruce Claflin in a statement.  

“Our cost efforts are more important than ever, given the softness we have seen in demand, both in past quarters as well as the current quarter.” 

In recent quarters, 3Com has been constantly reinventing itself amid restructuring, layoffs and red ink.  

It has not posted a profit since it spun off its Palm handheld computing division last year.  

In March, it shuttered its Internet appliance business, ending the brief lives of the Audrey Web-surfing device and Kerbango Internet radio. 

Claflin has said the company will focus on its core strengths – network gear for small and midsize offices, wireless products and infrastructure for Internet service providers. 

The company said in March it expects to return to profitability in fiscal 2002, which begins June 4. 

The job cuts announced Monday will reduce the work force to about 7,000 from 10,000 people, including full-time and contract workers.  

Most of the company’s operations will be affected, with the cuts taking place over the next several quarters. 

But there are no guarantees that this will be the last of the reductions, said 3Com spokesman Brian Johnson. 

“We can’t confirm or deny it will be the last one,” he said. “Clearly, it is our hope that this will get most of the work done.” 

3Com continues to trim other costs by reducing discretionary spending, lowering product costs and more effectively using its existing property and equipment.  

The company also has focused its business into three areas, each with its own operating unit. 

“Each independent unit will be smaller and more agile, able to better serve its customers and become more competitive,” Claflin said. 

In trading Monday on the Nasdaq Stock Market, 3Com closed down 38 cents to $6.52 a share.