The firm says it must make the cuts to remain competitive. Struggling with stiff competition and a difficult reorganization of its sales force, Xerox said it is narrowing its focus to two core markets: business machines, such as copiers and printers for home and medium-sized offices, and larger documents systems for big corporations.
The job cuts represent about 5 percent of the company's worldwide work force. Rick Thoman, the company's president and chief executive, said the marketplace has changed from the days when Xerox was a leader in photocopying technology.
"While these are difficult actions for our people, Xerox can no longer operate business as usual and expect to win,'' he said. "We're intensifying our drive to become a faster, leaner and more flexible enterprise."
The cuts were not unexpected. Xerox said in January that an overhaul was coming, and analysts this week had predicted job cuts and a restructuring charge of about $500 million to $900 million.
Friday's announcement is Xerox's fourth major restructuring in the last decade. In 1998, the company took a $1.1 billion charge and cut about 9,000 jobs in another reorganization.
Xerox said none of the cuts in the latest overhaul will affect its sales or research and development efforts. The charge includes about $175 million for closing facilities and scrapping some of its inventory.
The company said the cuts would affect all levels and geographic areas. Details will need to be hashed out among business groups, unions, government and local leadership, the company said.
"Over the past two years, we have made progress in improving productivity and reducing general and administrative expenses. But we need to go further," Thoman said.
Xerox spokesman Jeff Simek said some jobs will be cut from the company's headquarters in Stamford, Conn., but he would not say how many. Xerox employs about 600 at its headquarters, plus another 400 at offices in Hartford and Windsor.
The company's profits fell 52 percent in the fourth quarter, to $294 million, or 41 cents per share, compared with $615 million, or 84 cents per share, a year earlier.
Revenue in the quarter fell 6 percent to $5.44 billion from $5.79 billion a year ago. The company has said it expects to see another decline in earnings in the first quarter, which ends today.
Specific steps the company plans to take include:
- Streamlining production, including moving factories to areas where certain products are most in demand.
- Consolidating warehouses and distribution centers and eliminating backed-up inventory.
- Improving customer service.
- Combining support services for markting, finance and human resources.
- Improving Internet-based communications and support both inside the company and for customers.