Xerox to Take Charge to Cover 2,400 Layoffs

Xerox Corp. said Tuesday that it will eliminate 2,400 more jobs and close customer-service centers and other facilities in North America at a cost of as much as $400 million in the fourth quarter.

Xerox plans to cut more jobs in Europe after talks with labor and government officials, the company said. The smaller payroll will help Xerox meet a goal of saving an additional $1 billion. The staff cuts will cost at least $350 million.

Chief Executive Anne Mulcahy is trying to raise cash to meet debt obligations she inherited after taking over 15 months ago, including about $9 billion coming due in the next three years. Xerox is shrinking to ensure profit because sales have dropped, investors said.

“The more costs go down, the more of a cushion the company will have to produce profits,” said Brian Eisenbarth, who has about 900,000 Xerox shares among the $1 billion he helps manage at Davidson Investment Advisors. “If they can get sales up, with this lower cost base, that money will flow right to the bottom line.”

Xerox shares rose 2 cents to $8.05 in New York Stock Exchange trading. They have fallen 23% this year. Spokeswoman Christa Carone wouldn’t comment on how much the job cuts would reduce expenses and said the savings probably would come in 2003.

The Stamford, Conn.-based company is closing a call center, which handles customers’ calls, in St. Petersburg, Fla., and moving that work to Lewisville, Texas. It is closing another in Irving, Texas, and moving the work to Halifax, Nova Scotia.

Job cuts worldwide could reach 5,000, said Caroline Sabbagha, an analyst with Lehman Brothers Inc.

Xerox rebounded to a profit in the third quarter, using job cuts to help make up for a 10th straight quarter of falling sales. Mulcahy has slashed expenses by about $1.1 billion since last year by eliminating more than 13,600 jobs and closing plants. The copier maker reduced employment by 1,600 jobs to about 69,900 last quarter. It had about 94,600 workers in 1999.

Competitors such as Canon Inc. and Hewlett-Packard Co. have taken sales from Xerox with lower-cost products, prompting Xerox to introduce cheaper copiers.

Mulcahy said the company will meet the fourth-quarter earnings forecast of 9 cents a share, excluding certain costs, from Thomson First Call.