3Com will cut jobs as part of a restructuring designed to slash costs this year, the struggling communication products vendor announced on Tuesday.
The company, based in the US and with facilities worldwide, will cut both regular full-time and contract employment, as well as travel, product costs, property and equipment, it said in a statement. It hopes the moves will bring cost savings of $US200 million to $225 million per year, after it takes a one-time charge of $40 million to $60 million in its fiscal third quarter ending February 28.
"Every single area of the company is being reviewed" in all locations worldwide, said 3Com Hong Kong spokeswoman Eileen Lim in a telephone interview. Lim said the company has not yet decided what share of the cost cutting will be made in job cuts or how many positions will be eliminated. Product costs to be cut might include raw materials and parts, she said.
3Com is now deciding where savings can be achieved and expects to finish this work by the end of February, at which point the number of job cuts will be determined, according to the company statement.
The company cited the downturn in financial markets and the US economy, as well as upheaval in the telecommunications industry, for the restructuring. Once one of the world's largest networking hardware vendors, 3Com in recent years found itself stretched thin across several diverse businesses: enterprise and small-business LANs, telecommunications carrier equipment, remote-access devices and Palm personal digital assistants. The company spun off Palm Inc. as a separate company in July 2000, and in December 2000 spun off its carrier business as CommWorks.
