3Com swings axe in further restructure

Networking giant 3Com said last week it is to make another 170 job cuts following poor third-quarter results. It also announced the departure of its UK managing director, Adrian Hurel.

Networking giant 3Com said last week it is to make another 170 job cuts following poor third-quarter results. It also announced the departure of its UK managing director, Adrian Hurel.

The additional redundancies follow on from the 1200 announced last month and will hit the firm's US consumer broadband operation.

It is hoped these job cuts will save the company $18m (£12.6m) a year and help redress its recent poor financial showing.

Following a profit warning at the beginning of March, 3Com posted a loss of $122.8m for its third quarter ended 2 March, compared with a profit of $80.3m in the same period last year.

Turnover for the quarter fell 18 per cent to $629m.

The company is focusing on three areas to improve performance, according to Sandra van Vreedenbaad, director of international corporate communications at 3Com. "We are concentrating on Gigabit Ethernet, wireless and network telephony products, and building networks for businesses of all sizes," she said.

"We project a return to profit in the fourth quarter of the next financial year, which will be in the summer of 2002."

Meanwhile, Hurel left after nearly 12 years at the company and will be replaced by Paul Malcolm, who becomes country manager for the UK and Ireland.

Malcolm was previously director of the network service provider unit of 3Com, which he joined at the beginning of this year.

Van Vreedenbaad said: "Adrian has left to pursue other opportunities after being instrumental in the implementation of a number of changes to ensure success in the future. The appointment of Paul Malcolm will support the company's increased focus on selling through service providers."

The company blamed a combination of lower demand in the US and slower than expected growth in the DSL and cable modem markets for the poor results. The failure of consumer categories to generate a high enough turnover, and the move from high-margin to low-margin products due to price pressures, also played a part, the company said.

However, even with the new product focus, 3Com will still face price pressures, warned John Bateman, operations director at 3Com reseller Satelcom.

Also published in Computer Reseller News