Struggling network equipment maker 3Com Corp. will lay off 10 percent of its full-time work force to restore profitability and trim costs amid a souring economy, the company announced Monday.
The move, part of a $200 million savings plan unveiled in January, will affect about 900 of 3Com's 9,200 full-time employees and 300 of its 2,500 contracted workers around the world, said Bruce Claflin, 3Com's chief executive.
The company will cut back on travel spending and other discretionary costs, he said, and look to save money on manufacturing and purchasing. It also might sell off equipment and property.
"3Com will focus all of its resources on work critical to market leadership and superior financial returns," Claflin said.
Under the savings plan announced last month, 3Com will take a charge of $40 million to $60 million in the current quarter for the restructuring, which is expected to result in up to $225 million in annual savings.
The magnitude of layoffs was not unexpected, said Paul Sagawa, an analyst at Sanford Bernstein.
He noted that other network equipment providers, including Nortel Networks Corp. and Lucent Technologies Inc., recently slashed payrolls by a similar percentage.
3Com has not turned a profit since last year, when it spun off the division that makes Palm handheld computers. Claflin has said the company should be back in the black later this year.
3Com shares were up 46.9 cents, or 5 percent, to close at $9.50 Monday on the Nasdaq Stock Market.<
Please purchase a Premium Subscription to continue reading.
To continue, please log in, or sign up for a new account.
We offer one free story view per month. If you register for an account, you will get two additional story views. After those three total views, we ask that you support us with a subscription.
A subscription to our digital content is so much more than just access to our valuable content. It means you’re helping to support a local community institution that has, from its very start, supported the betterment of our society. Thank you very much!
Only subscribers can view and post comments on articles.
Already a subscriber? Login Here
CA Is Burning said:
Success! An email has been sent to with a link to confirm list signup.
Error! There was an error processing your request.
Sorry, an error occurred.
Already Subscribed!
Cancel anytime
Thank you .
Your account has been registered, and you are now logged in.
Check your email for details.
Submitting this form below will send a message to your email with a link to change your password.
An email message containing instructions on how to reset your password has been sent to the email address listed on your account.
No promotional rates found.
Secure & Encrypted
Thank you.
Your gift purchase was successful! Your purchase was successful, and you are now logged in.
| Rate: | |
| Begins: | |
| Transaction ID: |
A receipt was sent to your email.
(0) comments
Welcome to the discussion.
Log In
Keep the discussion civilized. Absolutely NO personal attacks or insults directed toward writers, nor others who make comments.
Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't threaten. Threats of harming another person will not be tolerated.
Be truthful. Don't knowingly lie about anyone or anything.
Be proactive. Use the 'Report' link on each comment to let us know of abusive posts.
PLEASE TURN OFF YOUR CAPS LOCK.
Anyone violating these rules will be issued a warning. After the warning, comment privileges can be revoked.