3Com to lay off 3000

(Telephony) 3Com today announced it is laying off 3000 employees--about 30% of its work force--as part of a plan to cut annual costs by $1 billion.

The announcement marks the second round of staff cuts this year by 3Com. In February, the company cut 1200 employees. A 3Com spokesman declined to comment on the possibility of additional cuts in the future.

Under the cost-reduction plan, 3Com expects to save $1 billion per year by reducing discretionary spending and employment costs, lowering product costs and making more effective use of its plant, property and equipment. First announced in March and expanded upon in April, the plan was created after the company posted a loss per share for its third fiscal quarter that was 3 cents larger than expected.

Today’s staff cuts, which should occur over the next two quarters, reduce the company’s headcount to fit with the operating units 3Com plans to have in place on June 4, the beginning of the company’s fiscal year.

3Com CommWorks will focus on access infrastructures and IP services platforms. 3Com Business Connectivity will handle high-volume, high-performance connectivity products for PCs. 3Com Business Networks will focus on Ethernet LAN switching, wireless infrastructure and networked telephony solutions for enterprises.

“We’ve made a decision as to what type of jobs we need to design this organization towards profitability,” said a 3Com spokesman. “What we’re doing is designing 3Com to be profitable under current economic conditions.”