3Com to cut workforce by 30% in second round of layoffs

Computerworld - Struggling networking technology vendor 3Com Corp. today announced its second round of layoffs this year, saying that it's cutting 3,000 employees in a move that will reduce its workforce by 30%.
The Santa Clara, Calif.-based company said the latest cutbacks will be made over several quarters and will affect both full-time and temporary workers. The new layoffs come just 10 weeks after 3Com let go 1,200 workers as part of a massive cost-cutting program aimed at turning itself around following a series of losses (see story).
3Com is trying to lower its annual expenses by $1 billion per year through a combination of staff reductions, cuts in discretionary spending and other internal changes. The restructuring plans were detailed in March when the vendor reported a pro forma net loss of $122.8 million for its fiscal third quarter, which ended March 2 (see story).
The second round of layoffs "is a necessary step in our plan to restore profitability," said 3Com CEO Bruce Claflin in a statement today. "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. Despite this slowdown, it is our intention to return to profitability as quickly as possible while positioning the company for profitable growth."
Brian Johnson, a 3Com spokesman, said the latest staff cuts will leave the company with about 5,000 full-time employees and 2,000 temporary workers. He added that the layoffs, plus a culling of money-losing products such as the Audrey and Kerbango consumer Internet appliances, are aimed at helping the company return to profitability by next year. "We're taking a very hard look at all of our products to ensure short-term profitability," Johnson said.
In connection with the spending cutbacks, 3Com also is reorganizing its business units in a bid to save money by streamlining operations and management. The company last month announced a plan to set up three separate business units, with those changes due to take effect next month.

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