3Com to lay off 10 percent of workforce

Networking vendor 3Com is shedding about 10 per cent of its worldwide workforce to reduce costs amid what it called “a continued weak demand for networking equipment”.

The layoffs will take place over the next two quarters and primarily affect employees in the US, Europe, the Middle East and Africa, with the deepest cuts coming in California. 3Com moved its headquarters from Silicon Valley to Massachusetts last month.

Despite the cuts, the company said it would continue to increase sales, marketing and customer service capabilities by adding account executives and consultants to support enterprise customers.

A/NZ managing director, Mike Clarke, said the job losses would mainly be in general administration and would not effect 3Com’s Australian operations.

“3Com plans to increase sales, marketing and customer services capabilities. That is primarily what we do here so we will be untouched,” he said.

3Com had about 3900 employees at the end of its fiscal third quarter in February, according to a company representative.

The layoffs come in part as a result of the sale of the company’s CommWorks carrier equipment business in May to UTStarcom but a continued weak demand for networking equipment was also cited.

“There’s no question the market has not returned to the pre-2000 days,” said Clarke. “There are still projects to be won but there are more competitors than there were before.

“Organisations and governments are more careful about how and where they spend their money. That may mean not updating PCs, it could see them decide not to install the latest version of Office and it may also cause them not to replace networking equipment.”

3Com president and chief operating officer, Bruce Claflin, said the company would function as a single operating unit, allowing it to set a more competitive cost structure.

3Com also said it planned to broaden its channel partnerships, particularly through its joint venture with Huawei Technologies.

- with Brian Corrigan

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