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is expected to announce this week its second big restructuring in two years, a move that will likely include thousands of layoffs and hundreds of millions of dollars of charges against the office-equipment maker's earnings, analysts said Tuesday.

In its 1999 annual report to the

Securities and Exchange Commission

, Xerox said it would implement its "initiatives for the 2000 restructuring program, which is expected to be announced in the first quarter of 2000." The first quarter ends Friday.

Rick Thoman

, the company's chief executive, told analysts in January that he expected the second restructuring to be smaller than the company's November 1998 plan, which cost $1.1 billion and resulted in 9,000 layoffs. The company has yet to give the details of any substantive savings resulting from the 1998 restructuring.

Many analysts predict the move will result in the layoff of 3,000 to 5,000 workers and cost the company from $500 million to $900 million. The plan is also likely to include some plant closings and the outsourcing of some of Xerox's inessential manufacturing units.

Investors hope the company's latest restructuring will be ambitious enough to help Xerox bounce back from several years of lower-than-expected growth and, more recently, depressed stock levels.

Xerox shares closed down 3/16, or 0.7%, at 26 3/4 Tuesday. The stock is down sharply from its $64 high last May, when it started dropping because of profit shortfalls.

"The stock is undervalued at this point," said Gregory Geiber, analyst at

Brown Brothers Harriman

. "If they can deliver on even part of their plans to turn around, you'll have a company with great brand recognition, world-class technology and a big reach in the market."

In the age of the Internet and paperless offices, Xerox has made some partially successful pushes to morph its once-dominant copier business into a full-service "digital document" company with hardware and consulting arms.

But analysts say the company is still weighed down by inefficiency, cumbersome and largely ineffective sales and marketing, and the accelerating obsolescence of its traditional copier business.

"A major issue with Xerox is that the corporate culture is historically that of the copier salesmen," Geiber said. "That business model is working less and less as we go forward. These types of restructurings will determine how smoothly and how fast they can adapt."

An attempt last May to revamp the company's sales force and billing management system was seen as only mildly successful, he said.

Geiber rates Xerox a long-term buy and short-term neutral. Brown Brothers Harriman does not underwrite stock or debt.

Xerox, which has roughly 94,000 employees, had a weak year in 1999. The company's net income plunged to $294 million, from $615 million in 1998. Revenue also fell 6.1% to $5.44 billion, from $5.79 billion in 1998.