Xerox is releasing more details about cost cutting as it releases first quarter numbers Monday morning.
It’s not unusual for Xerox, like many global companies, to cut costs when needed to stay competitive. But in releasing the first quarter earnings report spokesman Sean Collins says they are also getting ready for its earlier announced plan to separate into two, publicly traded companies later this year.
"There's a commitment there obviously with the separation, there’s costs associated with that, and we’re executing on our plan and we’re on track to complete the separation by the end of 2016.“
As part of that plan, the company now says it expects one-time separation costs of about $200 to $250 milion. CEO Ursula Burns says that Xerox has accelerated its cost reduction plans.
“We delivered adjusted EPS in line with our guidance, revenue growth in both the Document Outsourcing and BPO businesses of our services segment, and a strong renewal rate in Services. Document Technology revenue declines remained in line with last quarter and continue to be pressured by weak developing markets economies. We have accelerated our cost reduction efforts across the company and expect to begin realizing the benefits in the second quarter,” said Burns.
Overall, revenue for Xerox was down about four percent compared to last year, a little better than Wall Street expected. Profits of $34 million were down sharply from last year’s $225 million, due in part of restructuring and amortization costs.
Xerox continues to see more of its revenue derived from sales, and less from equipment. But at Brighton Securities, George Conboy says the two aren’t balancing off enough to help the company see a healthy boost in revenue.
“It’s great that services are growing, but the reason Xerox is going to be splitting is that services were not able to outshine the losses on the document side,” Conboy told WXXI News.
Xerox now employs about 6,400 in the Rochester area, down around 26 people from the previous quarter. Officials say that number ebbs and flows on a regular basis. The company says that recent reduction is related not only to restructuring efforts, but also to seasonal reductions and productivity improvements.
Xerox cut around 4,800 people worldwide in the first quarter.