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3Com cuts 500 more jobs in phase two, 2002

Mon, 01/14/2002 - 7:00pm
Anne Kerven

3Com Corp. will trim 500 jobs from its 5,900-member workforce and transfer some of its corporate activities into its trio of new operating units. The moves are part of 3Com's next phase of its year-old corporate refurbishment.

The company doesn't break out where the cuts will come from, says spokesman Brian Johnson, but the paring comes on the heels of last year's 6,000 layoffs.

A year ago, 3Com set goals that included saving $1 billion annually, closing unprofitable businesses and lines, simplifying its structure and investing in its stronger areas.

The company then trisected itself into a new structure, comprised of telecom unit CommWorks, a business networks unit and a business connectivity unit.

Part of the plan was to halve its 12,000-member November 2000 workforce to about 6,000 in November 2001, which was about 1,000 more jobs trimmed than it had planned, it said in its Q1 results in September.

Johnson would not comment on whether or not 3Com would eliminate more positions before reaching its Q4 profitability goal this year.

No closures will occur from today's actions, he says, but adds that 3Com will "continually assess the viability of its product lines. We are not announcing any product line discontinuations today."

In December, 3Com said in its Q2 results that it had achieved its annual $1 billion savings. It also jettisoned its Internet appliance business, discontinued its consumer unit and outsourced its manufacturing of high-volume products. At the time, President and CEO Bruce Claflin said the company had reached its cash flow positive goal for operations.

"Our last goal was to be profitable from operations in the quarter we announced Dec. 18," he says. "3Com met this goal. Our next goal is to be profitable in our fourth quarter."

The next phase includes establishing third-party partnerships, selective hiring in growth areas and transferring certain staff and responsibilities in corporate marketing, human resources and finance decision support to its operating units. Accounting, IT and other departments serving the three units will be delivered as shared services.

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