Xerox is restructuring in an attempt to cut costs and return to profit following a third-quarter loss of 115m ($167m).


Revenue for the third quarter fell 4% to 3.1bn, which was blamed on poor sales of its DocuTech and DocuPrint products caused by increased competition and problems with the salesforce in America.


"It is clear that just fixing our operational issues, though critical, is not sufficient. We must re-size our cost base, cut investment and significantly improve our balance sheet with asset sales and alternative means of providing customer finance," said chairman and chief executive Paul Allaire.


Xerox is planning to raise between 1.4bn and 2.8bn through sales of non-core divisions. It also hopes to cut 690m in costs over the next year, a quarter of which will be in Europe.


Analysts and investors were less than impressed with the results, and the firm's turnaround plans in particular came in for criticism. Shares closed down 3.4% at 6.08 after Tuesday's announcement.


Xerox is looking at ways to quit equipment financing, which The Wall Street Journal said accounts for 60% of its 12bn long-term debt. According to the Financial Times, the firm is in discussions with GE Capital to sell the division.


Other units up for sale include its Chinese operations, large-format division XES, spin-off firms ContentGuard and Inxight and a 25% stake in Fuji Xerox.


It is looking for joint venture partners for its legendary Palo Alto research centre and is in talks with third parties about investment in its desktop ink-jet business.


A strategic alliance is also on the cards for the firm's European paper operation, which is one of the largest suppliers of cut sheet paper.


Story by Barney Cox