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Turmoil at 3Com Canada

Insider say purge has left Canadian subsidiary without a handful of personnel

The recent high-level staff cuts at 3Com Canada, which eliminated the country manager and the channel manager, has put a big question mark on the subsidiary’s stability in the market place.

Dan McLean, channel analyst for IDC Canada, wonders about 3Com’s stability in Canada and if resellers

will want to partner with them.

“”Their hardship was a year or two ago when a raft of people were dropped from the organization. They’ve never recovered from that,”” McLean said.

He added that 3Com Canada has chosen the U.S.- managed route before and have flipped back and forth over the past five or six years.

“”There are some issues over strategy here in Canada,”” he said. “”The irony is they laid out their strategy a couple of months ago for Canada. The issue is, does it apply anymore?””

That strategy was conceived by ex-country manager Bruce Comeau, who was laid off less than six months after his appointment.

A spokesperson for the networking vendor confirmed layoffs, which would leave an operation that includes offices in Mississauga, Ont., Ottawa, Edmonton and Montreal without local leadership. Channel manager Gavin Fick was also let go.

According to a prepared statement from Karin Bakis of 3Com, the company is reshaping its sales operations in Canada to a model that relies more heavily on distributors and resellers.

Canada will remain an important market for 3Com and the channel will be asked to service existing accounts and grow the customer base. 3Com will no longer have a GM position in Canada, but will maintain a presence in here with “”specialists”” to support distributors and resellers, the statement said.

One source said that only four employees remain at 3Com Canada, while another wasn’t sure how many have been affected by this round of layoffs. The confusion rests with the many contract or short-term employees the subsidiary has hired at any given time, another source said.

The layoffs are part of a North America-wide sweep at 3Com consisting mostly of sales people, according to a former 3Com Canada employee who did not want to be named.

“”My understanding is this was not Canada, but worldwide. They let go a lot of sales people this round. In the past, they let go back end people such as central office administration people, marketing people,”” the source said. “”This is the first time in several rounds of cuts in the past year or two where they have let go a lot of sales people, and I think Canada got pinched along with everyone else.””

The source added that 3Com Canada was holding its own in the market but has suffered two years of poor performance.

“”3Com has been pinched like other telecom and networking companies. It is sad to see a former technology giant take it on the chin like this in Canada,”” the source said.

Comeau was appointed 3Com’s Canadian country manager at the beginning of this year, and told CDN he wanted to expand the subsidiary’s business into large enterprise markets through the channel and with its China-based Huawei Technologies Co. partnership as of 2003.

Comeau, 38, a seven-year veteran of the company, replaced Nick Tidd, who was named worldwide director of go-to-market strategies earlier this year in charge of the 3Com/Hauwei integration. Tidd did not return calls for comment on this story.

OAM’s Patrick Power was also surprised at the people 3Com laid off.

“”I have an excellent relationship with 3Com in Canada and clearly we need to know what the reasoning behind this move was. At this stage of the game, it is too early to say exactly how it will impact my business,”” Power said.

He added that OAM has a good relationship with 3Com corporately and deals with other U.S.-based vendors. “”This may not impede our ability moving forward with 3Com. I suspect this may be a reaction to quarterly financial analyst expectations,”” he said.

However, another source disagrees. “”The optics here are very bad. And it is at a time when they are trying to impress the channel and end users that they are a comparable alternative to Cisco and other big players. This doesn’t look good,”” the source said.