3com layoff is here
3Com Cutting 30 Percent of Work Force
May 7 4:56pm ET
NEW YORK (Reuters) - 3Com Corp. on Monday said it would lay off 3,000 people, or 30 percent of its work force, as the computer network equipment maker strives to return to profitability.
"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," Bruce Claflin, 3Com's chief executive officer, said in a statement.
A spokeswoman said its latest job cuts were in addition to the 170 workers it said it would lay off in March and the 1,200 jobs it cut in February. In March, 3Com announced a program to cut costs by $1 billion.
In the latest reductions, 3Com said it would cut its total staff to 7,000 from 10,000 employees, trimming from across most of the company's operations over the next several months.
Network equipment makers have struggled in recent months amid growing inventories and weaker demand for electronics.
The company declined on Monday to update its forecasts of a 5 percent to 12 percent decline in fiscal fourth-quarter revenues to $550 million and a projected operating profit.
3Com said the latest cuts will allow it to post a profit for fiscal 2002.
That contrasts with Wall Street's expectation of a loss of 49 cents a share for fiscal 2002, and a loss of $1.07 for fiscal 2001.
Shares of 3Com fell 38 cents, or more than 5 percent, to close at $6.52 Monday, down from its all-time high of nearly $120 in March of last year.
In February, the company said that the 10 percent reduction of its work force was due to "turmoil" in the telecommunications industry.
3Com has struggled with declining telecommunications equipment sales and a slowing U.S. economy. The company has announced several restructurings, and in March discontinued Audrey -- a countertop Internet-access device -- after a scant six months on store shelves.
It also said then it would pull the plug on its budding consumer appliance line, which included its "Kerbango" Internet radio.
The company said it is also evaluating ways to cut property and plant and product design costs.
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. |
