Xerox caps off COVID-crushing year with business split plans

Xerox caps off COVID-crushing year with business split plans

Revenue declined by 22.7 per cent during 2020, to US$7 billion

Credit: Dreamstime

Xerox Holdings is to carve up its entire business next year off the back of a 22.7 per cent fall in revenue last year. 

According to its latest financial report, the vendor intends to split up its different business arms by 2022, creating an entirely new software unit. The unit will consist of Xerox's cloud-based content management system DocuShare, multichannel marketing campaign software XMPie and augmented reality business CareAR. 

Xerox's restructuring comes after it posted US$7 billion revenue for the last year to 31 December, a decline of a fifth year-on-year. The vendor claimed its equipment sales and supplies were “significantly impacted” by the coronavirus pandemic.

“Due to their transactional nature, we expect that these sales will continue to fluctuate and gradually improve concurrent with office building reopenings and the roll-out of vaccinations, which is anticipated to allow more of our customers' employees to return to the office,” Xerox claimed in the report.

Meanwhile, another business unit, named Xerox Financial Services, is earmarked to become a global payment solutions business and will offer leasing for Xerox and third-party technology and office equipment.

Coming two and a half years after Xerox explored the sale of its leasing unit, its financing business is expected to expand the parent company’s customer base, establish cross-selling opportunities and provide additional leasing options for small and medium-sized businesses.

Xerox will also create a new unit known as its innovation business, which is expected to cover 3D printing and digital manufacturing, internet of things (IoT) sensors and services, as well as eco-friendly technology. 

As for the year ahead, Xerox is optimistic of revenue growth, forecasting a rise by at least 2.5 per cent to at least US$7.2 billion for 2021. 

“Times of adversity require working in unison, and I couldn’t be prouder of the way our team came together. We put our strategy to the test in 2020, delivering positive earnings per share and free cash flow, while returning capital to shareholders and continuing to invest in our future,” said Xerox CEO John Visentin.

“The team’s discipline allowed us to turn on a dime, tightly controlling expenses while steadfastly supporting clients. Though the impact of the pandemic continues in 2021, we expect to return to growth this year as we increase the breadth of offerings and reach new customers in existing and new businesses.” 

Absent from its financial records was any mention of its attempted takeover efforts of HP, which it was considered in at least November 2019, to only later scrapped in April 2020 due to COVID-19.

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