Xerox Corp intends to cut 10,000 jobs worldwide, or roughly 11% of its work force, over the next two years, according to a report in the Rochester Democrat and Chronicle newspaper which cited sources familiar with the company’s plans. Xerox is expected to announce the layoffs the week of April 6 and take a restructuring charge that could be as high as $1bn. It’s not clear what segments of its business will see the majority of the downsizing. The job cuts would come as part an initiative to cut costs at the company as it tries to compete in the market for digital office equipment against companies with much lower cost structures. Xerox currently spends $0.28 to $0.30 for every dollar in revenue on selling, general and administrative costs. The company’s goal is to reduce that number to the low 20s, more in line with competitors such as Hewlett-Packard Co. Calls to Xerox for comment weren’t returned. In January, the company reported net income for 1997 that rose 20.4% to $1.46bn on revenue that rose 4.5% to $18.17bn. Xerox shares have been performing well recently on the back of a string of quarterly earnings that have pleasantly surprised Wall Street. The shares closed at $96.625 on Tuesday, up $0.25. A year ago they were trading in the mid-50s. That bubble is set to burst, however, the first time that the closely-watched costs impede quarterly revenue growth.
