3Com announces 3,000 job-cuts

By : |May 9, 2001 0



NEW YORK: 3Com Corp. on Monday said it would cut its work force by 3,000
people, or 30 per cent of the workforce, even as the computer network equipment
maker tries to return to profitability. "Our cost-cutting efforts are more
important than ever, given the softness we have seen in demand, both in past
quarters as well as the current quarter," 3Com’s chief executive officer
Bruce Claflin, said in a statement.

In March 3Com had announced a program to cut costs by $1 billion. Network
equipment makers have struggled in recent months amid growing inventories and
weaker demand for electronics. 3Com said it would cut its total staff to 7,000
from 10,000 employees. Reductions will be made across most of the company’s
operations.

The cuts will be a major contributor in the company’s efforts to return to
profitability by fiscal 2002, 3Com said in a release. In February 3Com said it
would cut 10 per cent of its work force, or 1,200 jobs, amid what it called
"turmoil" in the telecommunications industry.

3Com said it has already realized cost savings from discontinuing certain
product lines, including its consumer Internet appliances, Audrey and Kerbango.
The company is also evaluating ways to cut property and plant costs, as well as
lowering the cost of product design.

In April 3Com announced it would form three independent operating units by
June 4. The units are CommWorks, which will serve network services providers;
Business Connectivity, which will make products for business computers; and
Business Networks, which will make network infrastructure products.

(C) Reuters Limited 2001.

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