3Com restructure claims 150 jobs

Organises client network product divisions into single unit after poor Q4 results

3Com has reorganised its client networks access products divisions in an attempt to revitalise the company's sales of network interface cards (NICs) and modems following their poor contribution to its latest quarterly results. The Networks Satan will create a Personal Connectivity Business Unit (PCBU), said CEO Eric Benhamou, and axe 150 jobs in the process. Some 150 other staff will be relocated elsewhere within the company. Essentially, the PCBU will try to sell DSL and cable modems to the company's installed base of analog modem customers. At the same time, it will push hard to interest users in home networking technologies, such a phone cable, wireless and radio frequency systems, for both domestic and business roles. 3Com's focus on the home networking market will centre on a series of products developed through its alliance with Microsoft. Microsoft's contribution is modem, printer and file sharing technology. It's also using the partnership to promote Universal Plug and Play, its would-be device connectivity standard. That will allow it to reduce both its dependance on and the operational overheads of its NIC and, particularly, analog modem lines. Indeed, it's from the modem side of the business that the majorioty of the 300 job cuts are coming. Both areas were highlighted by 3Com COO Bruce Chaflin as major contributors to the downturn in the company's Q4 1999 results, announced last month. These products accounted for half of the company's sales, but the money it made from those sales increased just one percentage point on Q3 98. Sales of its higher-end systems products increased 28 per cent. ®

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