The axe has finally fallen on 10 per cent of 3Com's worldwide staff after the networking vendor indicated it would "right-size" its business over the course of the year.
The company began sharpening the razor late last year with a preliminary announcement of its intention to cut costs by $US200 million to $225 million per year, after taking a one-time charge of $US40 million to $60 million in its fiscal third quarter, which ended on February 28 this year.
Citing the US economic downturn and turmoil in the telecommunications industry, 3Com last week conceded it would release 1200 employees or 10 per cent of its staff. The affected workers include full-time regular employees and contracted employees, the company said in a statement.
In Australia Michelle Kinna, 3Com marketing director, Australia/New Zealand, claims the cuts will be restricted to a single employee, which equates to just over 1 per cent of its local workforce, the implication being that 3Com Australia/NZ is fairing better than its US counterpart.
The company's local operations have been tracking well, according to Kinna, who is "not sensing a significant market slow down" in this region.
With the bulk of 3Com's local revenues derived from project business, Kinna is watchful of Queensland's upcoming bi-election. "A number of tenders are up in the air at the moment," said Kinna, due to a possible change of government. "But that happens every time there is an election. Does it affect tenders? Yes. But is it [because of] an economic downturn? No."