Xerox CEO: Company split will not affect Rochester, N.Y. jobs

Activist investor Carl Icahn, who possesses over eight percent of Xerox, is to choose three directors for the board of the services company.

As part of the spinoff deal, Icahn has bartered himself the ability to select three board members for the BPO business.

After the split, the two Xerox companies will be “more flexible, more responsive and essentially more fit and focused for the markets that we are attacking”, Burns said. Indeed, years ago its researchers at Xerox’s Palo Alto Research Center were responsible for developing many technologies that are still in use today, including Ethernet and the graphical user interface. During the same period in the previous year, the business posted $0.31 earnings per share.

The existing Xerox will focus on documents technology and “continue to be a global leader in document management and outsourcing”, according to a company statement.

Mr. Icahn has had several successful engagements with companies in the midst of breaking up in recent years, including at eBay Inc., Manitowoc Co. and Gannett Co.

In 2014, Hewlett-Packard performed a similar split, dividing its software and services operations from its printer and computer products. The companyÂ’s Services segment offers various business process outsourcing services, such as customer care, transaction processing, human resources, communication and marketing, and consulting and analytics services, as well as finance, accounting, and procurement services.

“This afternoon I spoke directly with Xerox Chairwoman and CEO Ursula Burns and she assured me that this split will not impact current job levels or Xerox’s footprint in Rochester”, he said.

The company brought the Xerox 941 to market in 1959 and changed its name to Xerox two years later.

“The reason why it was easy to get to a decision is because we do have two businesses that rotate around two different axes”, Burns said.

Xerox also released its fourth quarter earnings on Friday, reporting that fourth quarter revenues were down 8 percent to $4.7 billions.

In a surprising revelation, Burns hinted she distanced herself from the strategic review process despite her additional role as chairman of the board. At the time of that October announcement, Burns indicated that she was in favor of keeping the company together.

Xerox’s star rose in the seventies as it battled IBM and Kodak for dominance in the copier business.

Susquehanna Financial Group LLP analyst James Friedman said he thinks Xerox’s services business once it separates is “an easy acquisition for someone but they will try and grow it themselves”.

Xerox has been grappling with declining annual revenue for four consecutive years.