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March 22, 2005

3Com continues cost cutting

Networking vendor 3Com continues to trim headcount levels, days after reducing its net loss for the third quarter on the back of a sales decline.

By CBR Staff Writer

In February the Marlborough, Massachusetts-based company revealed it would eliminate 100 jobs in the US, 90 in the UK, and 30 in Ireland. Speaking to ComputerWire, 3Com spokesman Benjamin Perizweig said the 220 cuts are still ongoing over the following days, weeks, and months.

The cuts will result in severance and other costs of $15m during the third quarter of fiscal 2005 through the second quarter of fiscal 2006.

3Com has been shrinking for the past three years and is thought to have axed roughly 37% of its workforce over the past year. According to Perizweig, current workforce levels are now less than 2,000.

Last week, 3Com posted a larger than expected net loss of $53m, down from a net loss of $85.5m in the year-ago quarter. Sales fell 6.2% to $161.1m.

The aggressive jobs cuts are part of 3Com’s strategy to drive down costs as the company seeks to capitalize on its purchase of intrusion prevention systems developer TippingPoint Technologies Inc for $430m in December last year.

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