3Com Plans Layoffs for Savings

3Com Corp., a struggling maker of computer network equipment, said Monday that it plans to lay off workers as part of a plan to save at least $200 million a year.

3Com, which has been hurt by a slowdown in spending from telecommunications companies, plans to decide by the end of next month how many job cuts will be necessary, spokesman Mike MeCey said. The company employs 11,500 people worldwide.

“We’re not taking this decision lightly,” he said.

Santa Clara, Calif.-based 3Com also will trim travel spending and other discretionary costs, will find ways to save money on manufacturing and purchasing and might sell plant equipment and property, MeCey said.

All that is in addition to 3Com’s plans to create a wholly owned subsidiary that will build networks for enhanced voice and data services over the Internet.

3Com will take a charge of $40 million to $60 million this quarter to institute the restructuring. The company expects the changes will save $200 million to $225 million a year.

The company has not turned a profit since it spun off its division that makes the Palm line of hand-held computers last year. Chief Executive Bruce Claflin said last month that the company hopes to report a profit in its fiscal first quarter ending Aug. 31.

3Com shares fell 31 cents, to close at $10.38 on Friday on Nasdaq, the last day of trading before the announcement.