3Com plans spending cuts

(Telephony) 3Com announced in its Dec. 21 earnings report its plan to lay off workers and trim spending in other significant areas by the end of February to save what it hopes will be at least $200 million a year.

The company plans to redesign work and resources to improve its position in the fledgling telecommunications market.

The ongoing decision of where to make cuts focuses primarily on four areas: full-time and contract employees, discretionary costs such as travel and consultants, product costs, and plant property and equipment savings.

“We’re not taking this decision lightly,” said a 3Com spokesman. “The company is in the process of determining where the savings can be achieved.”

There are currently 9,200 employees worldwide and spending cut decisions are being reviewed both domestically and internationally. To accomplish its reduction plan, 3Com will take a one-time estimated charge of between $40 to $60 million to achieve its $200 to $225 million annual savings goal.

“It’s something that we’re taking seriously and we’re working hard on it,” a spokesman said. “They’re looking at all parts of the business and they’re working toward reaching this level of savings.”