Xerox Cut 900 Jobs, Reduced Severance in Q3
Restructuring Xerox Cut 900 Jobs Globally
Xerox cut 900 jobs and reduced severance payments in Q3 as part of ongoing restructuring efforts under Icahn-appointed leadership. In addition to these cuts, Xerox reduced severance in 2018, paying out $40 million in Q3 compared to the $39 million paid for the 600 layoffs in Q3 2017.
In continued cost-cutting efforts, Xerox announced in October that the company would end some health benefits for non-union retirees by the end of the year. The changes reportedly differ based on the employee’s retirement date and only affect retirees who were salaried such as management positions. Union retirees’ health insurance status will not change as they are covered by their contract, according to a union rep.
While Xerox did beat Q3 estimates for profit – in part due to these cost reduction efforts – the company fell short on revenue, leaving some to speculate on expected Q4 layoffs. Xerox reported Q3 revenue of $2.4 billion which is down 5.8% with equipment down 3.8% and post sale down 6.4%.
“Clearly, our priority to drive revenue requires the most effort,” Xerox CEO John Visentin explained on a call with analysts. “We are putting in place actions to sustainably improve our revenue performance. These start with building a more simplified, agile organizational structures and include further expanding our channel presence.”
Visentin went on to describe the new internal “Own It” program as a project intended to drive business optimization by improving compensation for employees producing results. “As I have said to our employees, we own our destiny – we have everything we need today to improve our performance. We have a lot more work to do but I am pleased with our early progress,” Visentin said. The Own It design phase is due to be completed in Q4.
Fujifilm Feud Continues
Further complicating Xerox restructuring, Fujifilm won the court appeal overturning injunctions against the beleaguered $6.1 billion merger with Fuji Xerox. According to Reuters, “the ruling by the New York State Appellate Court could give the Japanese firm leverage to bring Xerox management back to the negotiating table. Fujifilm is also suing Xerox in a separate U.S. suit that seeks well over $1 billion, accusing it of breach of contract in abandoning the deal.”
Visentin maintains that the appeals court’s ruling doesn’t mean very much for Xerox “because Xerox terminated that transaction for reasons unrelated to the injunctions.”