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XEROX ANNOUNCES WORLDWIDE PROGRAM TO IMPROVE PRODUCTIVITY AND CUT COSTS; WILL TAKE A $700 MLN 4TH QUARTER CHARGE TO COVER RESTRUCTURING ACTIONS

 STAMFORD, Conn., Dec. 8 /PRNewswire/ -- Xerox Corporation announced today a worldwide restructuring program aimed at improving its productivity and significantly lowering the document processing company's cost base.
 The program intensifies a continuing Xerox focus on productivity with the objective of being even more customer responsive and improving financial returns, said Paul A. Allaire, chairman and chief executive officer.
 Allaire said the program announced today "is not a function of any change in the current business environment, but rather it accelerates numerous productivity initiatives that have been under careful consideration for some time."
 "This program also will improve our ability to drive for increased revenue growth," he said.
 "The initiatives we plan reinforce our basic commitment to participate in the growing opportunities in the digital publishing, electronic printing and color markets," Allaire said. "Our long-term strategic direction is right and it continues on course."
 Addressing the company`s worldwide cost base, Xerox plans over the next two or three years to:
 -- Reduce its 97,500 worldwide document processing work force by in excess of 10,000, with about half of the reduction planned for 1994.
 --Close and consolidate certain facilities.
 --Simplify and streamline business processes and organization structure and reduce layers of management.
 In addition, the company is evaluating outsourcing some operations.
 A fourth quarter charge of approximately $700 million, or $6.82 a share, after taxes, will be taken to cover the costs associated with the employment reduction and other restructuring actions.
 Savings from the planned actions will begin in 1994 and increased savings will be realized in subsequent years.
 Allaire said that "to compete effectively, we must have a lean and flexible organization which can deliver the most cost-effective document processing products and services to meet the requirements of our customers."
 The planned changes will be implemented to ensure continuation of the traditional high level of Xerox customer satisfaction.
 The Xerox chairman cited several factors that contributed to the decision to accelerate the restructuring program. They included:
 --Opportunities to reduce costs enabled by the business division organization put in place in 1992.
 --Process reengineering driven by the application of technology.
 --Improvements in product reliability which reduce service requirements.
 --Increased efficiencies in manufacturing operations.
 A variety of approaches will be used to accomplish the planned employment reduction. These include normal attrition, involuntary layoffs and, in some cases, controlled voluntary programs.
 Details of the work force reduction and identification of facilities targeted for closure or consolidation will be announced when implementation steps have been developed in collaboration with affected employees, unions and local leadership groups.
 Xerox To Take Lawsuit Settlement Provision
 Xerox also announced that a $154 million, or $1.50 a share, after tax provision would be charged against fourth quarter results to reflect the cost of settling a 1992 antitrust class action lawsuit involving selling spare parts for high volume copiers and printers to independent service organizations.
 The pending settlement of the case, which is subject to the approval of the U.S. District Court in Marshall, Texas, provides for changes in Xerox policy to enable the sale of parts to independent service organizations and makes available licensing of certain Xerox software.
 The settlement provides for discounts of $225 million to members of the plaintiff class for use as partial payment on future purchases of Xerox products.
 Xerox said that service will continue to be a major asset in assuring customer satisfaction and an important contributor to the company's on-going revenue stream.
 -0- 12/8/93
 /CONTACT: Thomas C. Abbott of Xerox, 203-968-3378/
 (XRX)


CO: Xerox Corporation ST: Connecticut IN: CPR SU:

LG -- NY003 -- 1574 12/08/93 07:38 EST
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Date:Dec 8, 1993
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