Copier maker Xerox Corporation has reported that fourth-quarter earnings tumbled 52 per cent from a year earlier, roughly in line with reduced expectations, and said improvement may not come until the second half of 2000.

The company also said it would take a first-quarter restructuring charge "in the hundreds of millions of dollars" after taking steps to improve productivity and reduce costs.

The company has committed around £394 million (€500 million) to create 4,100 jobs by 2003 at its European customer service centre in Blanchardstown, Co Dublin, and its technology park in Co Louth, which is due for completion this summer.

Stating that the investment was a long-term, strategic plan for Europe, a spokesman said last night that the drop in profits would have no implications for its Irish initiative.

Fourth-quarter net income was $294 million (or 41 US cents per diluted share) down from $615 million, or 84 US cents a share in the same period a year earlier.

The spokesman cited a sales slowdown due to concerns over Y2K computer problems, the reorganisation of its sales force and customer support operation, and reduced revenues and profits from its Brazilian operations.

President and chief executive Mr Rick Thoman said of the first-quarter charge: "The exact size of this restructuring will be based on some difficult decisions we'll be making in the upcoming weeks. We think it will be in the hundreds of millions of dollars, but significantly less than the after-tax $1.1 billion charge we took in 1998."

The December warning marked the second consecutive quarter in which the company forecast lower-than-expected earnings. Xerox has struggled to reorganise its sales force to more aggressively compete in the merging markets for digital copiers and printers.

Xerox's share price has fallen 67 per cent from its peak last year, trading at levels not seen since the first part of 1996.

Xerox reiterated its December forecast that earnings were expected to show meaningful growth in the 2000 second half.