Xerox has announced plans to cut 5 percent of its workforce and lowered its forecast for the next quarter.

Xerox CEO Anne Mulcahy said that by trimming 3,000 jobs over the next six months, the company will save $200 million. The business environment is really tough at the moment, she said, as the outfit reported lower than net income than analysts expected.

Equipment sales declined 3 percent, as some of Xerox's U.S. customers either cut back on printing services, or turned to in-house management, or opted for lower-priced equipment, hurting the company's gross margins as the economy slowed, she said.

The expects earnings between 34 cents and 36 cents per share in the next quarter. Analysts had been anticipating fourth-quarter earnings of 43 cents per share.