Xerox Corp, the world's top supplier of digital printer and document management services, warned on Friday that first-quarter earnings will fall far short of its earlier expectations, as a slowdown in technology spending undercuts revenue.

Hurt by falling sales of equipment and printer-based supplies, the company said revenue in January and February was running 18 percent below year-ago levels. It also blamed poor results from its venture with Fuji <4901.T> for the worse-than-expected outlook.

The Xerox forecast now calls for first-quarter earnings of 3 cents to 5 cents per share, compared with an earlier outlook of 16 cents to 20 cents per share. Analysts looked for 17 cents per share, according to Reuters Estimates.

Xerox said that given the poor economy, it would seek to cut some $300 million in costs, on top of the $250 million in savings it previously planned.

It will also decrease its total debt during the first quarter, and will continue to do so throughout the year, it said.