Xerox to Split in Two

By Bob Neubauer

Xerox announced this morning that it plans to split itself into two companies: a business process outsourcing operation and a document technology company. The separation, expected to be completed by the end of 2016, follows an extensive structural review of the company’s portfolio and capital allocation options.

Though the leadership and names of the two companies have not yet been determined, Xerox is currently referring to them as the Document Technology company (with approximately $11 billion in 2015 revenue) and the Business Process Outsourcing (BPO) company (approximately $7 billion in 2015 revenue).

The BPO business will not include Xerox's Large Enterprise Operations/Document Outsourcing (MPS) organizations, which handle document management and document outsourcing. They will be part of the Document Technology company.

In its announcement today, Xerox gave this rationale for the separation: "It has become increasingly clear that the Document Technology and BPO businesses serve distinct client needs, have different growth drivers, and require customized operating models and capital structures. Thus, the separation of the two businesses will enhance their competitive positions and create significant value creation opportunities."

In the Xerox press conference today, Chairman and CEO Ursula Burns said the BPO market is growing at more than 5 percent a year, and she feels the Xerox BPO business can bring in more revenue as a separate business.

Here's what the New York Times had to say about the announcement.

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Bob has served as editor of In-plant Impressions since October of 1994. Prior to that he served for three years as managing editor of Printing Impressions, a commercial printing publication. Mr. Neubauer is very active in the U.S. in-plant industry. He attends all the major in-plant conferences and has visited more than 170 in-plant operations around the world. He has given presentations to numerous in-plant groups in the U.S., Canada and Australia, including the Association of College and University Printers and the In-plant Printing and Mailing Association. He also coordinates the annual In-Print contest, co-sponsored by IPMA and In-plant Impressions.