More: 3Com to Fire 380 Workers; Former US Robotics Executive Leaves
Santa Clara, California, March 18 (Bloomberg) -- 3Com Corp.
said it will fire 380 workers at two Chicago-area plants and
replace a top Illinois executive as the company struggles with
product lines acquired in its 1997 purchase of US Robotics Corp.
3Com, the No. 2 maker of networking equipment, said the
employees worked at former US Robotics plants that made desktop
computer modems and remote access servers, used by businesses to
route phone calls to the Internet. The fired workers represent
about 7 percent of 3Com's Illinois workforce.
The company also said John McCartney, president of 3Com's
client access business unit, which includes modems and remote
access products, would be leaving the company next week. No
replacement has been named and no more details were provided.
The news comes two weeks after 3Com said it was restating
financial results related to the acquisition at the urging of the
Securities and Exchange Commission. In December, 3Com's profit
fell more than 90 percent from the year-earlier period because of
slower-than-expected modem sales. Today's news may mean modem
sales have still not taken off.
''It suggests they're having to trim costs on the production
side for those products,'' said Abner Germanow, an analyst with
International Data Corp.
3Com Vice President of Marketing Neil Clemmons said the
moves were part of a strategy to shift manufacturing capacity
overseas, not the result of weak modem sales.
Sales of the company's new 56K modems are ''going well'' yet
judging the ''true demand'' for the products is difficult,
Clemmons said.
Last year 3Com bought US Robotics for $8.54 billion, nearly
doubling the size of the company and making it the second largest
industry player behind Cisco Systems Inc.
The firings, which are effective immediately, will affect
230 full-time employees and 150 temporary workers.
Shares of 3Com fell 1/2 to 33 1/2.
bloomberg.com
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