Xerox is continuing with its cost-cutting and division of non-core businesses and expects to return to profit in the second half of this year.


But chairman Paul Allaire predicted it would make a loss in the first quarter, similar to its Q4 figures.


Xeroxs plans include a further 4,000 job losses during the first quarter, the bulk of which will be in Europe. These are part of the cuts already announced, which included 2,000 jobs at the end of last year.


"We are aggressively implementing our cost reduction plans, which will yield more than $1bn in savings by the end of 2001," said president and chief operating officer Anne Mulcahy.


"Since the third quarter 2000 we have taken actions that account for more than one third of this target."


Xerox is also looking at selling further divisions including Xerox Engineering Services (XES), its wide-format business, as well as the previously announced plan to sell its stake in Fuji Xerox to Fuji Photofilm.


Xerox reported a loss of 82m ($119m) for the fourth quarter, on revenue down 13% to 3.3bn. Year-end figures showed a loss of 264m on sales down 5% to 12.8bn.


Story by Barney Cox