Xerox to detail cuts plan to staff

Workers at the Xerox plant in Dundalk, Co Louth, will learn today how the firm's $1 billion (#1.06 billion) cost-cutting programme could affect them.

The plant, to be completed by 2002 and employ some 2,100 staff, is one of several European manufacturing locations which may face cuts as part of a corporate restructuring.

Xerox says it wants to make $200 million in cuts in its manufacturing and design operations. It also wants to sell $4 billion of assets.

Company sources said last night the copier would announce the first steps in its strategy to turn around its European manufacturing operations.

When Xerox detailed its cost-cutting plan late last year, concerns were raised that the firm might scale back some of the $500 million development in Dundalk.

The development of the facility, which employs more than 800 people, was considered a major coup for IDA Ireland. It is forecast to be one of the town's major employers.

But the operation is one of only 12 manufacturing units worldwide. Xerox also has European manufacturing operations in Britain and the Netherlands. The scale of the company's cash flow difficulties was highlighted yesterday when the firm had to issue denials that it had appointed a bankruptcy adviser.

Mr Joe Kelly, head of public relations at Xerox Europe, said yesterday the company had no plans to file for bankruptcy .

"We have engaged the Blackstone Group [a New York-based private investment firm] to counsel us on our turnaround plan, including liquidity and cash flow," said Mr Kelly. "We have $1.4 billion in the bank and the turnaround strategy is very much on course."

Xerox shares fell sharply yesterday and are almost 80 per cent below their 52-week high at $5.875. Last week staff at Xerox's Dublin operation, which employs 1,600 people, were told that 100-200 staff may face a "realignment of responsibilities".

Mr Kelly confirmed yesterday this internal restructuring would result in some people at Xerox's welcome centre in Dublin being offered positions abroad. But he would not comment on "speculation" that the firm would announce plans for its European operations today.

Media reports in the US have highlighted that Xerox may sell its European paper and its large-format printing businesses.