3Com plans to cut 1000 more jobs

Sales drop and more staff to get their P45s

3Com has reported reduced sales for its first quarter 2002 and plans to lay off 1000 more staff.

The vendor said it has exceeded its targets to cut costs and number of staff that it announced in November last year.

Bruce Claflin, chief executive, said: "As we went through our restructuring we found opportunities to exceed our original plans for headcount reductions.

"We expect to end this quarter with about 6000 employees, 1000 less than our initial plan."

In a bid to cut $1bn (£689m) in expenses, as well as reducing headcount, the firm has closed its consumer business and shut down some unprofitable product lines. It is also outsourcing some high-volume manufacturing.

Clare Wales, 3Com Focus sales specialist at distributor Westcon, was positive about the new product and channel focus.

"The products are coming out of 3Com's ears at the moment, especially those related to its stackable switches. Everything that happened with 3Com and the channel in the past is now forgotten, and we have had no complaints from our reseller partners," she said.

3Com reported sales of $390m for the quarter ended 31 August, compared with sales of $934m in the same period last year.

It posted a loss for the quarter of $232m, after losing $59m last year.

Claflin said the firm's first quarter showed solid progress in its transformation and most goals were met. Although turnover was below its target, there were encouraging signs, he said.

"Given no more major economic upsets, we expect the results for the current quarter to be flat but improved modestly compared with the first-quarter results," said Claflin.