By Cliff Edwards
The Associated Press

CHICAGO - McDonald's Corp. has announced the first layoffs in its 43-year history, saying it will cut 23 percent of its headquarters staff over the next 18 months.

The company announced yesterday it will cut 525 of the 2,300 jobs at its Oak Brook headquarters. McDonald's executives hope to accomplish most of the reductions through voluntary severance and retirement packages.

Some employees had been taken aside over the past few weeks to be told their positions were being eliminated and offered the packages, several newspapers reported.

"Our vision is to continue to make McDonald's the world's best fast food restaurant experience, and this productivity initiative is an important step to helping us achieve that vision," McDonald's president and chief executive elect Jack Greenberg said.

LOS ANGELES - Rockwell Inter-national Corp. will spin off its semi-conductor business to shareholders and cut 3,800 jobs in a major restructuring of the automation and avionics businesses that will remain after the split.

The reorganization announced yesterday will include a $625 million charge, including about $200 million in cash to cover severance pay and other costs related to job elimination.

"We must slim down to stay competitive in a very competitive world," said chairman Don H. Davis.

- From staff and wire reports

Some reports say 10,000 jobs in jeopardy 
BEN DOBSIN 
Associated Press 

ROCHESTER, N.Y. - Even with its profits on the upswing, Xerox Corp. wants to carve deeply into costs to stay ahead of competitors, with analysts predicting big cutbacks. One newspaper reported 10,000 jobs would be eliminated. 

The belt-tightening at a company that only recently had been adding jobs comes as Xerox tries to boost futuristic, all-purpose sales of old-technology models still used in most offices. 

The Rochester Democrat and Chronicle, citing unidentified sources, reported that Xerox will announce in April plans to trim its worldwide payroll of 91,400 by almost 11 percent over the next two years. 

As many as 2,000 jobs will be lost in Rochester, home to 13,900 employees, and Xerox is likely to take a charge as high as $1 billion in the second quarter to pay for the cutbacks, the newspaper said yesterday. 

"We regard the story as speculative and have no comment on it," responded Judd Everhart, a spokesman at Xerox headquarters  in  Stamford, Conn. 

Wall Street analysts said there were rumblings that Xerox was sharpening its scalpel. 

"It's been kind of around that they were going to intensify their cost-cutting efforts but a number had not been put on it," said Jack Kelly of Goldman Sachs & Co. "I had a sense it was going to happen sooner rather than later." 

Xerox's new chief operating officer, G. Richard Thoman, who is widely viewed as likely successor to chief executive Paul A. Allaire, has stressed the urgency of bringing Xerox's cost structure closer in line with competitors led by Hewlett-Packard Co. 

Buoyed by robust sales of its new family of white copiers, Xerox enjoyed 20 percent jump in profits last year. Digital equipment now comprises more than 40 percent of sales. 

However, the company has struggled to pare costs as it makes the transition away from old-style copiers that operate with lenses and light bulbs to do-everything digital models that can be upgraded to plug in scanners, fax machine  and printers when connected to personal computers. 

Xerox wants to lower its costs to 25 cents for every dollar in sales from almost 29 cents last year.