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3Com cuts staff by 30%
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May 7, 2001: 10:12 a.m. ET
Networking company says move is intended to trim costs $1B a year
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NEW YORK (CNNfn) - 3Com Corp., provider of computer networking equipment, said Monday it will cut 3,000 jobs across-the-board, or 30 percent of its staff, in an effort to save $1 billion in annual costs.
The company said the layoffs are part of a two-fold effort to reduce costs and boost profitability. In addition, 3Com's (COMS: Research, Estimates) said it also will reorganize its business units to improve efficiency and lower costs for product design.
This is 3Com's second round of layoffs. In February, the Santa Clara, Calif.-based company announced 1,200 layoffs as part of a restructuring plan to save $250 million in annual costs. In March, the company announced an additional $250 million in cuts, including 170 jobs in its consumer broadband operations unit.
 In its latest job cuts, 3Com is reducing its workforce from approximately 10,000 to 7,000.
"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," CEO Bruce Claflin said. "Despite this slowdown, it is our intention to return to profitability as quickly as possible while positioning the company for profitable growth."
In a restructuring move that began year, 3Com, which has trailed competitors such as Cisco Systems (CSCO: Research, Estimates) and Lucent (LU: Research, Estimates), spun off its Palm handheld computing unit, once a small unit within 3Com. Palm today has a market value of $4.8 billion, while 3Com's market value is about $2.3 billion.
3Com shares were up 10 cents to $7.00 early Monday. 
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