Xerox to move employees out of the downtown building and over to the Webster campus

Jan 26, 2018

Credit Emily Hunt / for WXXI News

An iconic part of the downtown Rochester area is changing.

Xerox announced on Friday that it has negotiated an early termination of its lease for the Xerox Square building on South Clinton Avenue.

The company says it will transition several hundred of its 3,400 Monroe County employees to its Webster campus by the middle of the year. Webster remains the company’s largest global location, with more than 5 million square feet of office, manufacturing, lab and warehouse space.

“The move will reinforce our commitment to the region. By relocating our employees to Xerox-owned facilities in Webster, we will enhance team collaboration while investing in our owned facilities versus leased space,” said CEO Jeff Jacobson. He says that, “With occupancy at Xerox Square at less than 50 percent, it makes economic sense to relocate employees to available space that we own in Webster.”

In 2013, Xerox sold the downtown building, Rochester’s tallest, to Buckingham Properties and another local investor for $40 million.

At that time, it was said that Xerox would remain in the building as the tenant for at least eight years.  Xerox had been talking about its need to focus more on its core businesses and less on investing in real estate.

The 30-story Xerox Tower opened in 1967, and has been a key part of Rochester’s skyline. It was the company's world headquarters until 1969, when the headquarters was moved to Connecticut.

This news comes as a recent report in the Wall Street Journal quoted two of Xerox's biggest investors as pushing the company to consider a possible sale. The story says that Carl Icahn and Darwin Deason, who together control more than 15% of the company's shares, plan to call on Xerox to explore strategic alternatives. The WSJ also said the two investors want Xerox to break its joint venture with Fujifilm and fire CEO Jeff Jacobson.

A statement issued by the company said that the Xerox board and management are "confident with the strategic direction in which the company is heading and we will continue to take action to achieve our common goal of creating value for all Xerox shareholders."

At Brighton Securities, George Conboy says the Xerox personnel move does make sense.

"It makes absolute financial sense, if you don’t have that many people in the building, and you’ve got space in Webster, why not consolidate. The real question is, why did they wait until now," Conboy told WXXI News. He believes the recent pressure from the two dissident major shareholders may have helped lead to Xerox's effort to find some cost efficiencies.

Bob Duffy is the president and CEO of the Greater Rochester Chamber of Commerce. He says he understands Xerox’s logic on this.

“The most important thing is, Xerox, the jobs are staying here. Shifting from downtown to Webster and certainly, there will be an impact downtown, but we have to work harder and work with GRE and the downtown business community and the city and county to try and fill that space," Duffy said.

Mayor Lovely Warren issued this statement:

"Xerox has been and continues to be an important part of Rochester’s economy, and I am glad these jobs will remain in Monroe County. The City of Rochester will continue working with RTS and other partners to ensure that relocated employees will be able to fully access their jobs. Xerox Square will remain a significant part of our Center City and it is important that it continues to be viable as we attract more jobs, build safer and more vibrant neighborhoods and create better educational opportunities for each of our citizens."

The move will please Town of Webster officials, who recently saw the Xerox spinoff company, Conduent, move several hundred employees from Webster to the former Medley Centre in Irondequoit. Webster Supervisor Charles Nesbitt says it should help his town's economy.

"We’re happy here because they’ll come to Webster, and find out where life is worth living, and maybe go into some stores and shop and maybe buy a house or two."  Nesbitt says he understands Xerox is at a crossroads now,  and the town wants to help the company.