3COM news--
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NEW YORK, Sept 10 (Reuters) - 3Com Corp (COMS,Trade) said on Wednesday it planned to cut up to 1,000 jobs, outsource all manufacturing and close its Dublin, Ireland, plant to boost efficiency.
The Santa Clara, California-based network equipment maker said it will outsource its direct manufacturing, distribution and related activities for enterprise networking products to Flextronics International Ltd (FLEX,Trade) and Jabil Circuit (JBL,Trade). The transition will take about six months, it said.
Flextronics will also assume responsibility for global distribution from 3Com's regional hubs, the company said.
The smaller rival to networking giant Cisco Systems Inc. (CSCO,Trade) will also realign its product development and supply chain businesses as part of a plan to reduce expenses, it said.
The company, which had been struggling with a decline in demand due to sluggish global economies, posted a wider quarterly loss in June and said it expected "no material improvement in the marketplace" in the current quarter, adding that SARS had hurt sales in Hong Kong and Singapore.
The changes will result in a global reduction in force in manufacturing, product development and supply chain operations, with about 1,000 of 3Com's employees affected globally, the company said.
"These actions further enhance 3Com's ability to bring competitive and comprehensive networking solutions to the enterprise market," said Bruce Claflin, president and chief executive officer, in a statement.
3Com also said it had set up a Taiwan Design Center, which will be responsible for the design and manufacture of low-end, standardized volume products. The company expects the center to be operational by its fiscal second quarter, which ends in November.
3Com shares closed up 6 cents at $5.95 in Nasdaq trading on Tuesday. |
