3Com to outsource manufacturing, cuts jobs

Effort to reduce costs to result in loss of 1,000 jobs

3Com Corp. will outsource all of its manufacturing in an effort to further reduce costs, resulting in up to 1,000 job cuts, the network hardware maker said Wednesday.

Over the next six months, 3Com will move its manufacturing, distribution, and related activities for enterprise networking products to Flextronics International Ltd. of Singapore and Jabil Circuit Inc. of St. Petersburg, Florida, the company said in a statement.

3Com also established a "Taiwan Design Center" for designing and manufacturing low-end, standardized volume products. The Taiwanese facility will be operational by the end of November and fully staffed with 3Com personnel and partner personnel by the end of May next year, 3Com said.

As part of the outsourcing actions, 3Com will close its manufacturing facility in Dublin by the end of February, it said. The moves will affect about 1,000 3Com employees worldwide, the majority in the company's manufacturing and supply chain operations.

3Com will keep development on technologies it sees as growth markets in-house. This includes voice-over-IP, network security, and its new LAN technology called expandable resilient networking, or XRN, 3Com said.

Outsourcing is the latest in a series of actions taken by 3Com to improve efficiency and cut costs as it works to return to profitability. The company in June said it would lay off 10 percent of its staff. Also, 3Com moved its offices from Santa Clara, California, to Marlborough, Massachusetts. At the end of May, 3Com employed 3,300 worldwide, a spokeswoman for the company said Wednesday.


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