3Com CEO Eric Benhamou last week announced he will step down from his post in a move seen as the end of a tumultuous, year-long restructuring campaign.
Benhamou, who has led 3Com for the past 10 years, will step down on January 1. He will be succeeded by 3Com's current president and chief operating officer, Bruce Claflin.
Benhamou's departure comes as 3Com completes a major restructuring program aimed at improving profitability by focusing on high-growth areas. Among the changes, 3Com has exited the large corporate LAN/WAN and analog modem businesses, and has let go of the first of an expected 2000-3000 employees. The company also spun off its Palm division.
As chairman, Benhamou will work with Claflin to guide the company in its business strategy and technology direction. He also plans to become more active in trying to influence IT policy and the direction of the IT industry.
Days before Benhamou's announcement last week, the company released its first-quarter financial results, reporting a net loss of $US41.3 million, or 12 cents per share, on sales of $933.3 million. That beat the expectations of analysts who had predicted the company would lose 34 cents per share. In the same quarter last year, 3Com earned $113.7 million, or 32 cents per share, on sales of $1.2 billion. The $933.8 million in sales included $127.5 million from the exited analog modem and LAN/WAN high-end chassis businesses. Excluding those sales, 3Com recorded sales of $806.3 million in the quarter, up 20 per cent from the fourth quarter3Com's results were in sharp contrast with Palm, which reported record revenue of $401 million for its first fiscal quarter of 2001 - its first as a separate company from 3Com - along with a net income of $17.3 million. Palm's market capitalisation is more than $30 billion while 3Com's is now a little more than $6 billion.
Benhamou's departure comes at the right time because 3Com has almost totally reinvented itself from what it was under his leadership, said Frank Dzubeck, president of consulting firm Communications Network Architects.
"Now the Palm thing is over, the US robotics thing is over . . . [3Com] is out of the [large] enterprise business . . . it's a good time to exit, stage left. At least he's leaving on a good note," Dzubeck says.
As for the future of 3Com with Claflin at the helm, Dzubeck sees a continuation of 3Com's current course - a strong focus on service providers and small to mid-size businesses and consumers.