Xerox's Next CEO Expects More Layoffs After Split
December 07 2016 - 8:20AM
Dow Jones News
Xerox Corp. will have to lay off more workers after it splits in
half, the company's next leader said, even as he predicted sales
declines would ease over the next three years.
The Norwalk, Conn., company is preparing to separate its legacy
printer-copier business from other contract services like
toll-booth software and call centers. The services segment, called
Conduent Inc., is scheduled to split off at the end of the
year.
President Jeff Jacobson, who will become Xerox's chief executive
after the spin-off, said in an interview that the company needed
changes to put it on a stronger footing.
"Part of that unfortunately comes from headcount reductions,"
Mr. Jacobson said. "You want to be a leaner organization."
The company will have 39,000 employees after the separation, but
Mr. Jacobson declined to say how many jobs would be cut. The
company has said it plans to improve its bottom line by about $1.5
billion a year, mostly through cost reductions.
Xerox forecasts that it can generate above-market sales by 2020,
a low benchmark for a sector that the company says has shrunk about
3% in recent years.
The company expect revenue trends next year that will be similar
to the current year, with sales picking up in the second half of
2017.
Revenue from its core documents business fell 3.7% to $8.04
billion during the first nine months of 2016 after accounting for
foreign-exchange rates.
The hardware maker plans to launch 29 products next year, adding
printer models and introducing new software for handling documents
tied to specific sectors, such as health care.
In a presentation Wednesday to investors, the company is
expected to repeat its commitment to maintaining an
investment-grade rating and say it will pay out a 25-cent dividend
each year, down from the current 31-cent payout.
Mr. Jacobson, who joined Xerox in 2012, also said the company
would break from tradition by distributing machines through
resellers that carry multiple brands, an effort to gain more sales
from small and mid-sized businesses. Xerox currently sells machines
directly and also through exclusive resellers, a model that mostly
serves big corporate customers.
After shedding most of its unrelated services units, the company
doesn't plan to make major near-term asset sales. "We don't really
see anything of significance that we would divest," Mr. Jacobson
said. "What we do have is some cash cows."
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
(END) Dow Jones Newswires
December 07, 2016 08:05 ET (13:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Xerox (NYSE:XRX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Xerox (NYSE:XRX)
Historical Stock Chart
From Apr 2023 to Apr 2024