>3Com Corp. said Monday that it will decide by the end of February how many jobs to cut as part of an effort to save at least $200 million a year and return to profitability.
The Santa Clara-based computer networking equipment maker, which employs 9,200 worldwide and 2,100 in the Bay Area, has struggled since the late 1990s to find a niche in which it can thrive.
Last year, 3Com stopped supplying networking equipment to large corporate customers in order to concentrate on selling to phone companies, small businesses and consumers. But phone companies slowed spending in late 2000, forcing 3Com -- among more than a dozen of its competitors -- to miss its financial goals in the last months of 2000.
3Com lost $142.4 million, or 41 cents a share, in the quarter ended Dec. 1, compared with net income of $177.3 million, or 51 cents a share, a year earlier. Revenue dropped 35 percent to $789.5 million.
CEO Bruce Claflin said in December that 3Com expects to report a profit from operations in the quarter that ends in August. To make that happen, he said 3Com would consider a wide range of cost-cutting initiatives including laying off workers, spending less on travel and payments to consultants, reducing manufacturing and purchasing expenses and selling off manufacturing capacity.
3Com plans to take a restructuring charge of $40 million to $60 million this quarter.
Questions about the cutbacks came up last week during an employee video conference with Claflin, but the company did not provide specific details.
``The company is in the process of determining where the savings will be achieved,'' said spokesman Brad Leone on Monday. ``They expect to have this phase of the process complete by the end of February. This will determine the number of layoffs and where they will take place.''
3Com shares closed Friday at $10.38, down 31 cents, on the Nasdaq stock market. The stock market was closed Monday in observance of the Martin Luther King Jr. holiday. |
