Xerox cuts jobs, reduces severance payments
Xerox cut 900 people from its global workforce in the third quarter as part of an ongoing restructuring, while reporting it has reduced the severance it pays employees who are losing their jobs, particularly in the United States.
In the first full quarter that CEO John Visentin has led Xerox, after a proxy battle that shifted leadership of the company to activist investors Carl Icahn and Darwin Deason, the Norwalk-based printing equipment maker reported net income of $89 million in the third quarter, down from $179 million the year before, with sales off 6 percent to under $2.4 billion.
Speaking Wednesday morning on a conference call, Visentin said he was disappointed with the company’s revenue in the third quarter, with Xerox focused on improving how it compensates employees for producing results under a new internal “Project Own It” program among other changes Visentin described as “optimization” actions.
Xerox paid severance of $40 million during the quarter, along with another $1 million for lease cancellations, versus severance of $39 million in the third quarter of 2017 when it cut 600 jobs.
“Optimization actions will expand in (the fourth quarter) as we complete the Own It design phase,” Visentin said. “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.”
Even as it continues to cut jobs internally, Visentin’s team is laying out an initial strategy to acquire businesses that can help Xerox build momentum.
And Xerox is adding $200 million to an existing stock repurchase program pegged previously at $500 million, after buying back about 4 percent of the company’s shares outstanding in the third quarter alone. Xerox shares were down slightly after the opening bell Wednesday, with shares off about $3 on the year to $26.35 on the heels of the proxy war and Icahn and Deason abandoning a previous, $6.1 billion Xerox agreement to merge into Fujifilm Holdings.
During the quarter, Xerox added to its executive suite with the appointment of Louie Pastor as general counsel and Joanne Collins Smee as chief commercial officer leading sales and channel strategy. Smee served previously for a short period as deputy commissioner for the U.S. General Services Administration which oversees purchasing for the U.S. government, and before that worked a dozen years for IBM.
The headquarters building of Xerox at 201 Merritt 7 in Norwalk.