SAN FRANCISCO (03/31/2000) - U.S. office equipment maker Xerox Corp. is to cut 5,200 jobs, or 5.5 percent of its work force, as part of a worldwide restructuring program, the company announced today. Xerox will also take a pretax charge of around US$625 million in its upcoming first quarter to cover the planned restructuring.
First announced in December of last year, Xerox hopes the restructuring will turn the company into a leaner organization that can focus more in its core businesses. This should allow the firm to compete more effectively against its rivals in the office equipment and document solutions market, as well as boost the firm's overall value, Xerox said in statement issued today.
The move is all about balancing Xerox's cost structure for its two main units.
The company's general market operations is responsible for largely indirect sales of its printers, copiers and multifunction devices to home, small and networked offices, while the firms' industry solutions group is concerned with selling document solutions directly to larger customers through the vendor's sales force.
The planned $625 million charge will cover the costs of cutting 5,200 positions worldwide via voluntary programs and layoffs, as well as $175 million related to closing facilities and scrapping inventory, Xerox said.
The savings Xerox will achieve through its restructuring will be in the order of $95 million this year and an additional $300 million next year, according to the company.
Xerox is also predicting that the restructuring will enable the company to achieve earnings growth in the mid-to-high teen percentage range next year.
Among the company's upcoming restructuring efforts are plans to move some of Xerox's product lines to regions where they are most in demand; to improve the efficiency of the firm's logistics and supply chain operations; and to cut by around 10 percent the number of middle and upper managers in Xerox U.S. operations and elsewhere in the world. The company will also look to outsourcing and the Web as ways to make its business more cost-efficient.
Xerox, in Stamford, Connecticut, is at +1-203-968-3000, or at http://www.xerox.com/.