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"Proposals that could lead to the closure of the SOHO (Small Office Home Office) operations which includes the Inkjet operation are being put to employees," a spokesperson for the company told ElectricNews.Net.
"If the proposals are accepted it could have a significant effect on Xerox's Dundalk operations," the spokesperson said.
Around 450 people are involved in the Inkjet and personal copiers operation which make up the SOHO operation in Ireland.
The company's SOHO operations which employs 1500 people around the world will be discontinued in the next six months.
The company has tried to find an equity partner for these operations and even though a lot of interest was expressed market conditions stopped any company taking a stake in the struggling business.
It is understood that the company then had no choice but to come up with proposals to the close the operations because the company is in "turnaround mode."
In the first quarter of 2001, the company recorded a USD82 million pre-tax loss in its SOHO business.
Revenues for SOHO were USD139 million, representing three percent of total first-quarter revenues.
Xerox expects its second quarter pre-tax SOHO operating loss to be similar to the first quarter.
"By exiting the SOHO business, Xerox would generate significant cash savings and improved earnings that are incremental to our previous expectations to return to profitability in the second half and for the full year," said Anne M. Mulcahy, Xerox president and chief operating officer.
The inkjet model required an upfront financial investment, which only turns to profitability as an increasing equipment population drives the recurring and profitable sale of supplies.
"In a short period of time, the market for inkjet has changed dramatically, and recent data indicates that the slowdown will continue," added Mulcahy.
She said, "Xerox is therefore making the right proposal at the right time. We would be better positioned to build the new Xerox around our core strengths in the production printing and network office environments, focusing on high-growth opportunities in colour, solutions and services."
In April, Xerox reported a first quarter operating loss of USD86 million or USD0.12 a share but said it expected to return to profitability by the second half of 2001.
This compared to a profit of USD220 million or USD0.30 a share for the first quarter of 2000.
At that time, the loss had been lower than expected by analysts and Xerox's share price rocketed on the news jumping over 33 percent on the New York stock exchange and by over 30 percent on some European stock markets.
Xerox announced in June it would continue with its restructuring programme which includes asset sales of USD2 billion, cost cuts of USD1 billion which will involve cutting around 4,300 jobs worldwide and refocusing the company on its core businesses.
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