Xerox might make layoffs in Kentucky

ssloan@herald-leader.comOctober 23, 2012 

Call-takers shown at a Xerox call center on New Circle Road in 2011.

CHARLES BERTRAM | STAFF

Layoffs might be coming to Xerox’s operations in Kentucky as the company seeks to deal with a still-fragile economy.

In announcing quarterly earnings Tuesday, the company said it is likely to take a restructuring charge of $50 million to $100 million in the fourth quarter related to its services business.

That portion of the company includes the former ACS that Xerox acquired in 2010. ACS was a major employer in Kentucky and Xerox now has around 5,000 employees here. Worldwide, the company has 97,000 employees in its services business with Kentucky representing just more than 5 percent of the employees.

Xerox’s Kentucky spokesman, Chris Gilligan, declined to address whether the restructuring could mean layoffs here, and if so, how many.

“It’s premature to speculate what impact it would have on any markets,” he said.

In announcing the restructuring, CEO Ursula Burns told analysts in a morning conference call that “this quarter presented its fair share of challenges, and we believe economic headwinds are still ahead of us.”

Revenue at the Norwalk, Conn.-based company, which is focused on outsourcing services and traditional printer hardware, fell 3 percent year over year to $5.4 billion in the quarter. Earnings fell to $282 million, or 21 cents a share, from $320 million, or 22 cents a share, in the same quarter a year ago.

The services segment saw sales rise 5 percent year over year to $2.85 billion and now accounts for 52 percent of the company’s overall revenue. Even though sales were up, profit margins were below expectations.

“So what we are doing with the restructuring is to make sure that we are aligning the organization to deal with that new reality,” executive Lynn Blodgett told analysts. Blodgett oversees Xerox Services; he had previously led ACS when it was acquired by the company.

Analyst Shannon Cross of Cross Research said she expects that the company will focus any cuts on management and back-office personnel.

“They’re looking for ways to optimize,” she said. “The business just isn’t coming like they expected, and they’re having to deal with that.”

Scott Sloan: (859) 231-1447. Twitter: @HeraldLeaderBiz.

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