May 6, 2003 6:25 PM PDT

3Com to leave Silicon Valley

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Networking company 3Com, which saw its fortunes rise and fall in the heart of Silicon Valley, will move its senior management to its East Coast offices and replace some top executives amid a push to concentrate on its enterprise business.

3Com said Monday it would move its chief executive and other senior management from Santa Clara, Calif., to its offices in Marlborough, Mass., where much of 3Com's enterprise networking business is concentrated. The move will also involve executives in Illinois.

3Com is in the process of selling its CommWorks carrier equipment unit to UTStarcom for $100 million in cash. That transaction, which 3Com said would be completed in the next 30 to 60 days, is a key part of 3Com's effort to get away from selling equipment to telecom service providers in favor of focusing on corporations.

"One of our goals is to unify 3Com's management team into one location," Bruce Claflin, 3Com chief executive, said in a release. "Because Marlborough will be the operational center of 3Com after the sale of CommWorks, it made sense that we consolidate here."

Clafin said move would make 3Com's operations more efficient. He said two-thirds of 3Com's domestic market potential was on the East Coast and about half of the company's sales was in Europe.

"The majority of our customers and partners are more accessible from Marlborough than Santa Clara," Clafin said.

3Com also said it will replace several senior executives who will not be relocating, although no reason was given. Those positions include 3Com's senior vice president for corporate services; its senior vice president for legal, general counsel and secretary; and its vice president for corporate branding and communications. 3Com said it expected to conclude executive searches for these positions by late summer or fall and that the current executives would serve until then.

3Com, which flew high in the early years of the Internet boom, eventually saw itself bested by competitor Cisco. Now both companies face increasing competition from Dell Computer.

As 3Com's competitive position and the market for networking supplies deteriorated in tandem, the company laid off many of its employees in Santa Clara and around the world.

The company said it would retain some presence in Santa Clara, including its vice president of business development.

 

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