Posted by : trraju on Apr 13, 2004 - 06:45 AM WebTechnology

SAN FRANCISCO -- Four years after the dot-com bust, some tech companies are still slashing staff and restructuring operations.
Last week, business computer maker Sun Microsystems announced the latest details of a major overhaul, which include 3,300 layoffs and a partnership with former rival Microsoft. PC makerGateway this month announced plans to close all its stores and lay off 2,500 workers.
Sun and Gateway have made cuts several times since the dot-com bust of 2000. Yet they say more changes are needed. So do other tech companies:

* Tech services firm EDS is in the middle of a restructuring that will result in 5,200 job cuts and $250 million in charges by 2005. ''We had to drive down our costs and increase productivity,'' says EDS spokeswoman Liz Bonet.

* Internet service provider EarthLink is laying off 1,300 workers, or 40% of its staff, as part of a restructuring that's lasted more than a year. ''We're trying to do everything we can to improve profitability,'' spokesman Dan Greenfield says.

* 3Com has made big changes since 2000. The network-gear maker spun off or sold several divisions, including Palm and U.S. Robotics. 3Com's staff shrank from 10,600 workers in 2000 to 2,100 today. Its most recent quarter included $40 million in restructuring charges. ''I'm happy to say, we're close to being done,'' says 3Com Chief Financial Officer Mark Slaven.

* Redback Networks this year completed a restructuring plan that included filing for Chapter 11 bankruptcy protection and a 73-for-1 reverse stock split. Redback CEO Kevin DeNuccio says the company is getting back on its feet after an ''unprecedented'' downturn.

These ongoing restructurings show how far the tech industry has fallen since 2000, and how slowly it's recovering.

Nearly every tech company ordered cuts after the bust of 2000, but many underestimated the length of the downturn, says CIO magazine publisher Gary Beach.

Tech spending is up 1.4% this year, says technology research firm Gartner. That's far below boom-era growth, says Gartner analyst Marcus Blosch. ''It's going to be another tough year.''

Tech companies today must adjust to everything from new security risks to the increase in outsourcing, says Northwestern University management professor Wally Scott. Major changes also ''take awhile to work through,'' says University of California-Berkeley business professor Dwight Jaffee.

But long-term restructuring can hurt a company. If workers constantly fear for their jobs, morale suffers. Customers may bolt. And constant confusion can make it tough to get things done, Scott says.

To see more of USAToday.com, or to subscribe, go to http://www.usatoday.com

© Copyright 2004 USA TODAY, a division of Gannett Co. Inc.