Xaar is reorganising its manufacturing and research and development facilities following problems with the XaarJet 500 print head that have led to lower-than-expected revenues and margins.

Production of all print heads, including the 500 which is currently carried out in Cambridge will be done at the firms Swedish factory. The move will mean the loss of 45 jobs in the UK, 17 of which are short-term contracts.

"From a management point of view the strength of the company is in manufacturing in Sweden and R&D in Cambridge," said chief executive Jan Fineman. "With R&D and manufacturing on the same site it is difficult to keep focused.

"This will allow the UK to do more long-term R&D into new technologies and product development."

The move will create 20 new jobs in Sweden. The process will begin in the new year and is expected to be completed by April. To cover the move the firm will take an exceptional charge of 1m this year.

Story by Barney Cox