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Xaar to cut staff numbers after lowering forecasts again

LONDON, Oct 2 (Reuters) - Troubled industrial inkjet company Xaar (LSE: XAR.L - news) said it planned to cut costs and around 20 percent of its staff after a slowdown in China forced it to reduce forecasts for this year and next.

The group cut its forecasts again after demand from Xaar's products from the ceramic tile market softened during the third quarter of the year due to a slowdown in construction activity in China. It had also cut forecasts in August and June.

Xaar, based in Cambridge, England, and employing around 800 people, said it now expected 2014 revenue to be between 5 and 10 percent below the bottom of the previously announced 115 million pounds to 125 million pounds ($186-203 million).

As a result it is cutting costs to prepare for what it expects to be lower revenue in 2015. That will include a 20 percent cut to the global workforce.

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"We are highly disappointed to have to make this level of cost reduction given the progress achieved over the last four years," Chief Executive Ian Dinwoodie said.

"Our exposure to the ceramic tile market in China, which delivered such strong growth over the last few years, is now driving a reduction in our sales."

(1 US dollar = 0.6168 British pound) (Reporting by Kate Holton; editing by Susan Thomas)