It only took a few days into 2024 for Xerox Corp. to announce a jarring organizational restructuring plan that will result in a 15% staff reduction for the first quarter, which translates to approximately 3,100 layoffs (based on the company’s most recent SEC filing). There was also a shakeup on the OEM’s executive team, which saw the Dec. 31 departures of noted industry veterans Tracey Koziol and Joanne Collins Smee.
The Norwalk, Connecticut-based company’s stock tumbled more than 10% as of midday trading Wednesday. The news comes only days after Xerox’s subsidiary, Xerox Business Solutions (XBS), was hit by a data breach.
The fallout is part of Wednesday morning’s announced new operating model and organizational structure as part of its ongoing Reinvention initiative. In a release, Xerox CEO Steve Bandrowczak said the company is focusing on three key areas: improvement and stabilization of its core print business, increased productivity and efficiency through the formation of a new Global Business Services organization, and disciplined execution in revenue diversification.
“The shift to a business unit operating model is a continuation of our client-focused, balanced execution priorities and is designed to accelerate product and services, go-to-market, and corporate functions’ operating efficiencies across all geographies we serve,” he added.
More specifically, Bandrowczak outlined the priorities and desired outcomes.
Core Print Business:
- Simplify core products to align with the needs of economic buyers of today’s hybrid workplace.
- Increase investment in a partner-enabled go-to-market model that supports how clients prefer to procure their print solutions.
- With partners, pursue strategic market share gains by increasing reach, improving cost to serve, and enhancing profitability.
Global Business Services:
- Through simplification, drive enterprise-wide efficiency and scalability with centrally coordinated internal processes leveraging shared capabilities and platforms.
- Garner operating leverage and investment capacity for our growth segments through lower transaction costs.
- Improve quality for all business units and functions while focusing on continuous improvement of clients’ and employees’ experiences.
IT and Digital Services:
- Create greater organizational focus on Xerox’s emerging Digital Services and IT Services capabilities to accelerate revenue diversification toward markets with higher growth and profitability profiles.
- Implement a new multi-segment organizational focus to drive internal alignment and incremental services penetration with existing and prospective clients.
The new operational model saw some executive staff additions. John Bruno will lead the enterprise alignment of print, digital services, and IT services businesses. Louie Pastor returns to Xerox as chief transformation and administrative officer, tasked with overseeing the Xerox Reinvention Office and the newly established global business services organization. Flor Colon has been appointed chief legal officer and corporate secretary.
In the midst of the changes, two of the more familiar names—at least from the office dealer point of view—are no longer part of the organization. Koziol served as executive vice president of global offering solutions and chief product officer and had been with the organization since 2014. She had previous stints with Dell and Motorola.
Collins Smee, the company’s executive vice president and president of the Americas, had spent more than five years with Xerox, starting as chief commercial officer in 2018. In her most recent role, she led the Xerox Business Solutions team, and worked with the channels business that supported Xerox agents and dealers.
For Charles Brewer, president of Actionable Intelligence and a veteran analyst, the move has a “rinse and repeat” quality to it. He wonders whether the latest action is too little, too late.
“It’s not surprising to see Xerox initiate another round of layoffs; the company has been floundering for years,” he said. “It seems to chase one shiny, fruitless, bright opportunity after another. Realigning to focus on print makes sense, but the firm has lost so much ground.
“As a supplies analyst, I’ve watched Xerox lose significant market share over the past decade. At one time, the company was a leader in most consumables categories—finished cartridges, bulk toner, paper, specialty media. But that’s no longer the case. Xerox’s supplies business has been decimated. Let’s see what ‘reinvention’ brings.”
As for last weekend’s data breach, it was detected and contained by Xerox cybersecurity personnel. While details weren’t available, the company released a brief statement that said the event was limited to XBS U.S. The company is conducting an investigation with the assistance of third-party cybersecurity experts.
“The incident had no impact on Xerox’s corporate systems, operations or data, and no effect on XBS operations,” the release said. “However, our preliminary investigation indicates that limited personal information in the XBS environment may have been affected. As per our policy and standard operating procedure, we will notify all affected individuals as required.”
