Xerox officials stated that its turnaround plans, which include asset sales, cost reductions and plans to exit the equipment finance business, are on track. To date, the company has not announced any major disposition of real estate assets in relation to its turnaround program.
"We are aggressively implementing our cost-reduction plans, which will yield more than $1 billion in savings by the end of 2001," says Anne M. Mulcahy, Xerox president and chief operating officer. "Since the third quarter of 2000, we have taken actions that account for more than one-third of this target, including the reduction of approximately 2,000 jobs worldwide in the fourth quarter. This activity will intensify with the reduction of 4,000 jobs in the first quarter and additional reductions through the balance of the year."
Bill McKee, a Xerox spokesman, says that the company is holding discussions on where employee cutbacks will be initiated, but notes that no specific plans have been finalized. The company employs 94,000 workers worldwide, including approximately 500 at its 255,000-sf corporate headquarters facility at 800 Long Ridge Road here.
Xerox officials reported that in late 2000 it had closed on the $550 million cash sale of its China operations to Fuji Xerox. The company also noted that earlier this month it had secured $435 million in financing from GE Capital of Stamford. In addition, the company is in negotiations with GE Capital to provide equipment financing for Xerox customers in several European countries. Xerox currently supplies equipment financing for its US, customers but is looking to exit that business, which is also headquartered here.
Paul A. Allaire, Xerox chairman and chief executive officer, commented that the sale of its China operations and its financing deal with GE Capital are part of the company's primary objective--cash generation. Among a host of other initiatives underway is the search for a "strategic non-competitive partner" for its $65 million a year operation at its Palo Alto Research Center in California.
For the year, Xerox posted a $117-million profit, or 12 cents per share before special items. Including special items, Xerox reported a loss for the year 2000 of of 63 cents per share, or $384 million. Revenues in 2000 were $18.6 billion, compared with $19.5 billion in 1999. Fourth quarter revenue was $4.8 billion, which was 13% lower than the fourth quarter of 1999. In the third quarter of 2000, Xerox posted a loss of $167 million or 20 cents per share.
Xerox's Allaire stated that, in terms of the company's future, "We are executing every element of our turnaround plan to yield the fundamental changes in our business that will deliver long-term benefits. We are confident in Xerox's turnaround in 2001, continuing to generate cash, and returning the company to profitability in the second half and for the full year."
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
