In Tech Enterprise Metamorphosis, Xerox Continues Trend of Diversified Companies’ Specialized Splits
Xerox Corporation Chairman and CEO Ursula Burns has forged a profitable—and paperless—future for the giant tech enterprise during her last half-decade at the helm. She’s not only the first African-American woman to lead a Fortune 500 company, but now the former Xerox intern is disrupting the century-old company’s legacy as one of Forbes Most Powerful Women.
The Norwalk, Connecticut-based company has 140,800 employees worldwide. Following Xerox’s four straight years of declining profits and a record $6 billion acquisition of the data service provider, Affiliated Computer Services Inc., the tech enterprise will divide into two publicly traded companies.
The shake–up results in a partitioning of two very different Xerox worlds: an $11 billion document technology domain—including printers and fax machines—and a realm responsible for business process outsourcing.
“These two companies will be well-positioned to lead in their respective rapidly evolving markets and capitalize on the opportunities that now exist to expand margins and increase market share. I am confident that the extensive structural review we conducted over the last few months has produced the right path forward for our company,” noted Burns.
“We will now position the companies for success and execute our plan to separate them in the shortest possible time frame while continuing to focus on achieving our 2016 goals.”
The second-largest shareholder at Xerox, Carl Icahn will gain three board seats on the services side of the split.
“We think this is a major move and will greatly enhance shareholder value,” Icahn explained.
“I have had several meetings with [CEO] Ursula Burns and applaud and respect her for doing what she believes shareholders want—just as John Donahoe did with eBay and PayPal.”
The Xerox split would be on-trend with diversified American corporations’ shift towards segmenting into more highly specialized divisions. HP has divvied its single tech enterprise into Hewlett-Packard Enterprise Co.—concentrating on servers, professional services, and software—and HP Inc., specializing in personal computer and printer sales. Similarly, PayPal Holdings Inc. has broken away from its parent company, eBay.