When I started with Xerox in the late '80's, everyone knew about Xerox. Our products were even in movies like Romancing the Stone and 9 to 5. But several years ago, the leadership in New York lost direction and started to focus on the wrong possible future. Instead of embracing it's past, they thought focusing on AI and IT services would be our future. What do you expect from those that developed the computer mouse, the graphic user interface, Ethernet communications and the first laptop computer but gave it all away, then gave away the very lab that developed them. Now, their lack of foresight has made me the latest victim of an IRIF, yet the very people that destroyed the company get a golden parachute. A new broom sweeps cleanly, get rid of all the upper management because they are not worth their salary and their lack of vision is hurting real people.
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None of this looking backward will help the current situation. Xerox leadership has to prevent all of the following technical bankruptcy triggers from occurring in 2027:
• The $40 Million ABL Liquidity Floor: If further supplier tightening drops Xerox’s available capacity on its ABL revolver below 10% (approx. $40 million), a springing Fixed Charge Coverage Ratio (FCCR) covenant of 1.00x activates. Because Xerox cannot meet this coverage test, breaching this floor would trigger a technical default, allowing lenders to freeze the revolving cash line. Cross-default provisions would instantly accelerate the rest of the $2.17 billion debt stack.
• Lexmark Integration Execution Risk: Management's operational recovery plan is entirely dependent on hitting a $350 million annualized cost-saving run-rate through the Lexmark integration ($175M–$225M targeted for full-year 2026). If contract inertia or operational frictions delay these cost extractions past mid-2027, trailing twelve-month (TTM) EBITDA will fall below the baseline needed to sustain standard operations.
• IT Solutions Cash Burn: The IT Solutions segment is burning $35 million to $50 million annually due to negative 4% to 6% EBITDA margins. Management's sales-force separation and rebuild is not projected to reach a run-rate cash breakeven until December 2027, assuming vendor credit terms do not worsen further.
Do this well and Xerox has a fighting chance in 2028. Fail to do this well and there is no point to talk about the current leadership as they will not be there in a post Chapter 11 restructured Xerox where the new group of owners (primary creditors) will install a new management team whose sole objective is to recover the debt owned by Xerox, NOT to turn the company around.
Unlike turnaround efforts in the past, Xerox now has to do this without employees whose working for Xerox was a family tradition passed down through generations, defined by excellent benefits, stable career trajectories, and massive pride in the company's pioneering innovation. However, continuous corporate overhauls, shifting market realities, and aggressive restructuring have fundamentally eroded that lifelong compact.
Xerox's modern decline was accelerated by a fundamental shift from prioritizing people and customer requirements to focusing heavily on short-term shareholder returns and cost optimization.
@df Most mo--nic take ever on this site.
RT was a patsy CEO for the accounting fraud under CEO PA who preceded and succeeded RT.
For whatever her faults, AM listened to employees, saw the huge opportunity the internet was creating to finally take advantage of telemetry instrumentation on XOG products, eliminating vast inefficiencies across billing and services, and upped R&D across the board when everyone else was telling her to slash and burn.
It paid off, and it allowed a series of truly remarkable id--ts to follow her and turn a profitable F500 enterprise into a dead man walking farce. Those id--ts never looked more than one quarter ahead, and with derelict DEI boards could treat the company as their personal piggy bank because the dividends kept getting paid out.
AM’s true failure was to not grooming a non-id--t/non-psychopathic successor ultimately doomed the company.
UB should go down in the history of American business as why you never hire an executive who despises the workforce, and only ever persisted because old fa-t exec WH took her on as his pet project.
Many thought the era of a CEO who struggles to articulate words properly ended when the board was forced to fire UB, but when SB got promoted upon JV’s COVID shot-induced cancer death, the ret***ed enunciator streak began anew.
@cg spot on!
Who would down arrow “my first 25 years was incredible”? College paid, new role with promotion every 2-3 years, sometimes sooner, bonuses, profit sharing, training, mentorship, never missed a raise. My pay went from $7k to $225k + bonus and stock in 40 years. Parties, picnics, lifelong friendships. I am grateful, but still furious at the nitwits who ruined it. SB was the d-mbest and that is saying something.
@g7 100%
If you started in the late 80s, hopefully you were ready for retirement anyway. Retirement is a good thing, assuming you have the funds to do so. Good luck with whatever is next.
The last one out please turn off the lights.
I started mid 70's. First 25 years were incredible.
The Dominoes started to fall with Thomas. Ann put lipstick on this pig her entire tenure. Ursula was the patsy, a literal “sows ear”. The final dominoes- ACS, Fuji card tricks and Carl Icahn. They have been re arranging Titanic deck chairs since 2015. I jumped in an VRIF with severance and full benefits for 32 weeks in 2017 at 58. My spouse during Covid also at 58 and 32 yr career on two weeks notice so her 100% RIGP lump rollover was not in jeopardy.
Drownings are usually silent. Xerox has sipped its last shallow breath. Like Kodak. Must be in that lake water..
@OP Xerox suffered from a textbook case of strategic marketing myopia, very much like the railroad companies and Blockbuster.
• Railroad companies - "we are in the railroad business", instead of "transportation business", the fatal substitution overlook - Cars, Trucks, Airplanes
• Blockbuster Video - "we are in the video rental business", instead of "Home Entertainment Business", the fatal substitution overlook - Digital streaming
• Xerox - "we are in the copier, toner, paper business", instead of "Information/Document Management, Workflows", the fatal substitution overlook - Personal computers and digital file systems.
However, Xerox’s failure features a fascinating, highly ironic twist: while the railroads and Blockbuster failed to invent the future, Xerox actually invented the future and then gave it away (GUI, Mouse, Ethernet, Drag and Drop, Client Server File System) because they couldn't see past their core product. Xerox executives were blinded by the massive profit margins of their copier lease and toner business, they completely failed to see the commercial value of these innovations.
Xerox explicitly double down on its identity as the "marks on paper" company, aggressively acquiring other printing technologies to defend its turf when computers threatened its traditional copier empire. Tektronix and Impika acquisitions were disastrous. Attempt to enter Business Process Outsourcing (BPO) with ACS acquisition was also unsuccessful.
Because of this historic shortsightedness, Xerox missed out on a multi-trillion-dollar digital economy that it essentially created. Decades later, as physical printing continuously declined due to remote work and digital transformation, Xerox shrank into a fraction of its former self, caught in a cycle of cost-cutting, debt accumulation, and corporate restructuring.
The point is - Xerox demise started a long time ago when the personal computer (hardware and software) was invented and brought to market by Apple and Microsoft. Xerox's own market myopia plus subsequent innovations capitalized by others accelerates Xerox's decline. The irony was that Xerox was made irrelevant by its own innovations of which it viewed as not relevant to its core business.
Hard lesson. You seem young. Learn to trust what you see, not what you are told.
Just like a Clint Eastwood movie where he rides into the sunset, and fades into oblivion. While you scream raise the dividend. Real class.
More like a class action lawsuit.
Sorry to hear. We have lost a lot of good people who gave their heart and soul here. History will have a place for these parasites that have ran and are running this ship to the bottom of the sea. Wish you well