Xerox Split Creates Uncertainty for Local Workforce
For Rochester area Xerox employees, anxiety and uncertainty about the future are accompanying Friday morning's announcement that the company will divide into two independent publicly traded companies.
As part of the move, CEO Ursula Burns also announced a three-year plan to save $2.4 billion across all segments.
RIT assistant professor of accounting, Dan Tessoni, says the clearest path to that goal is a reduced labor force.
"It's also a very, very painful process, as we've learned over a number of years now in the Rochester area, but it's unlikely in order to realize those types of savings, that there won't be job cuts."
Xerox employs between 6,400 and 6,500 workers locally.
The document technology business that focuses on copiers and printers employs most of the local Xerox workforce in Webster.
To stand out among an increasing number of competitors, Tessoni says that business needs to come up with more innovative solutions. "For example, copiers that can effectively and efficiently perform multiple tasks instead of just placing documents onto paper."
The other individual company created by the split will focus on business services outsourcing.
Chairman and CEO Ursula Burns says splitting into two companies will give Xerox more flexibility in meeting the needs of its clients.
There has been speculation that investor Carl Icahn, who recently acquired over 8 percent of Xerox shares, had pushed for the split, but in an interview on CNBC today, Burns said that decision was made by the board and Icahn wasn't part of that conversation.
At Brighton Securities, George Conboy has a different view.
"I'm sure that she was being correct and accurate , that Carl Icahn didn't make that decision for them, maybe didn't start the analysis for them certainly, but did he have no influence at all on the decision? I don't believe that.”
Burns was asked about whether she will with Xerox after the split. She said she purposely did not want that to be part of the discussion with the board while they talked about the need to split the company into two parts.
“Now that we've made that decision and we're into implementation phase, I will have some recommendations for the board and we'll discuss that, and obviously one of the discussions will be my role as we go forward.”