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More layoffs expected at 3Com

The networking company plans to announce its latest round of layoffs as early as Monday, part of a plan to cut costs by $1 billion in its ongoing reorganization, sources said.

3Com plans to announce its latest round of layoffs as early as Monday, part of the embattled networking company's plan to cut costs by $1 billion in its ongoing reorganization, sources said.

Some 3Com employees were told by their managers Friday to expect layoffs Monday morning. As reported earlier, sources within 3Com have said the latest layoffs could be in the vicinity of at least 30 percent, depending on the business unit. The Santa Clara, Calif.-based company currently employs about 8,400 workers.

"My boss told me May 7. Everyone is going into work Monday with the expectation that layoffs are going to happen," one source said Sunday night. "If they postpone it, the effect would be tremendously negative. People are now demoralized. We don't expect to get a lot of work done Monday."

3Com spokesman Brian Johnson declined comment Sunday night, but said the company will make an announcement before the stock market opens for trading Monday morning. 3Com representatives have previously said the company planned to announce the layoffs and other cost-cutting measures by mid-May, possibly sooner.

Like other tech companies that are laying off employees, 3Com has been pummeled by the economic slowdown as sales of equipment to telecommunications carriers and businesses have slowed. Competitors such as Cisco Systems and Nortel Networks, among others, have also been in the throes of layoffs. 3Com, which has announced profit warnings the past two quarters, announced in March a reorganization plan to save $1 billion a year.

3Com--which has been continually restructuring the past two years--has made some cost-cutting measures earlier this year, including laying off 1,200 employees this spring and the killing off of its consumer business, which included its Audrey Web-surfing appliance and Kerbango Internet radio.

For the past month, 3Com employees have been bracing themselves for the latest round of layoffs. To reach its goal of $1 billion in cost savings, 3Com is cutting expenses such as travel, and plans to decide what to do with excess office space. But no matter what, the company needs to lay off more employees, 3Com's Johnson said two weeks ago.

Johnson said two weeks ago that company executives have been meeting to decide what products and which of the remaining 8,400 employees they would keep.

Chief Executive Bruce Claflin is planning a special forum to discuss 3Com's future with employees May 17, according to an internal memo Claflin sent to employees two weeks ago.