3Com cuts 3,000 jobs

Troubled US telecom equipment maker 3Com is to cut 3,000 jobs - 30% of its workforce - as it battles to return to profit.

The axe will fall across all of 3Com's operations and will include contract workers and freelance staff.

The company has plants in Ireland, Singapore, and at its corporate headquarters in Santa Clara, California.

Thousands of jobs have been lost in the technology sector since the start of the year as a global economic slowdown eats into profits.

Turmoil

Telecom giant Marconi, mobile phone makers Motorola and Ericsson and computer maker Dell have all announced large scale redundancies.

The 3Com job cuts, announced on Monday, come on top of 1,200 redundancies announced by the company in February, amid what it called "turmoil" in the telecoms industry.

The redundancies are part of a plan to return the troubled company to profitability by 2002.

The company said it would cut its total staff to 7,000 from 10,000 employees.

Internet

In addition to its factories, 3com has service and support centres in the Asia/Pacific rim, Europe, Latin America, and the US.

3com said it had already made some cost savings by discontinuing certain product lines, including its consumer internet appliances, Audrey and Kerbango.

The company is also evaluating ways to cut property and plant costs, as well as lowering the cost of product design.

"Our cost-cutting efforts are more important than ever, given the softness we have seen in demand, both in past quarters as well as the current quarter," Bruce Claflin, 3Com chief executive, said in a statement.

Cost cutting

In March, 3Com announced a program to cut costs by $1bn.

Last month it announced it would form three independent operating units by 4 June.

The units are CommWorks, which will serve network services providers; Business Connectivity, which will make products for business computers; and Business Networks, which will make network infrastructure products.

In June last year 3Com spun off its Palm handheld computer unit.

The company now focuses on home-networking, high-speed modems and wireless and internet telephony, and networking for small and medium-sized businesses.