Xerox to cut jobs, take pretax charge

December 12, 1991|By New York Times News Service ..HC RnB

Xerox Corp. said yesterday that it would eliminate 2,500 white-collar jobs, or more than 20 percent of the company's total, the middle of next year and take a $175 million pretax charge against earnings in the current quarter to cover the cost.

Xerox said the reductions in managerial and support staff would cut its costs by $150 million next year and $200 million in 1993.

All the reductions will come from Xerox's document-processing business, which employs 101,000. Production workers, engineers, direct sales and customer service staff will not be affected. The reduction will be most strongly felt in the region around Rochester, N.Y., which will lose up to 800 jobs.

Paul A. Allaire, the company's chairman and chief executive, described the reductions as part of "our ongoing process to create a more efficient, flatter, customer-responsive organization." He said Xerox, which is based in Stamford, Conn., had decided to accelerate its restructuring because of the uncertainty caused by the weak economy.

"We would have done this over the next two years anyway," he said. "We think we have changed other parts of the company enough that we can do without some of this supervision."

Some Wall Street analysts viewed the plan as overdue and overly cautious. "It's a first step in the right direction, but the company is still too fat," said Curt Rohrman, who follows Xerox for First Boston.

Mr. Rohrman estimated that the reductions would cut Xerox's sales and administration costs to 32 percent of revenue from 33 percent. "Less than 30 percent is a lean company," he said.

Xerox said about 500 jobs would disappear through attrition. The company said it was still uncertain how much of the remainder could come through voluntary programs, but some layoffs would occur before the end of the year.

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