Xerox Holdings Corp.’s stock plunged 12% today after the printer maker announced plans to let go 15% of its workforce, which comprised more than 20,000 employees at the end of 2022.

The layoffs are part of a restructuring initiative meant to reverse the company’s recent revenue declines. The effort will also see Xerox reshuffle its leadership team, simplify its product portfolio and adopt a new go-to-market strategy.

Founded in 1906, Xerox is among the world’s largest printer manufacturers. Its products range from home printers to industrial printing presses that can process millions of pages per month. The modern laser printer was invented by Xerox’s storied PARC research division along with the computer mouse, Ethernet and numerous other foundational technologies.

The company also operates in a number of other markets. It sells several software products, including an application called XMPie that enterprises use to manage marketing campaigns. Additionally, Xerox provides professional services that help customers maintain their printers and streamline related tasks.

The company’s sales declined 7.4% year-over-year in its third quarter. Xerox’s Print and Other segment, which accounts for over 90% of its revenue, experienced a 6% drop in demand. One of the main objectives of the restructuring plan the company announced today is to revitalize its core printer business.

As part of the effort, Xerox will simplify its product portfolio to more closely align it with customer requirements. In conjunction, the company is rolling out a refreshed go-to-market strategy that will lean on channel partners. The goal of the new strategy is to increase its market reach and profitability.

The restructuring initiative’s second major focus will be the creation of a new global business services unit. In the enterprise, global business services is a term for the practice of relegating backoffice tasks such as accounting to a single, centralized division. Xerox hopes that the move will “drive enterprise-wide efficiency and scalability with centrally coordinated internal processes.”

The third major focus of the restructuring push is the company’s Digital Services and IT Services segment. The segment includes, among other offerings, Xerox’s software products. The printer maker will expand its focus on this area with the goal of improving its profit margins.

“The evolution of Xerox’s reinvention aligns our resources in three key areas – improvement and stabilization of our core print business, increased productivity and efficiency through the formation of a new Global Business Services organization, and disciplined execution in revenue diversification,” said Xerox Chief Executive Steven Bandrowczak.

The company didn’t disclose the exact number of employees who are impacted by the restructuring. Regulatory filings cited by CNBC indicate that Xerox had 20,500 employees at the end of 2020, which suggests about 3,000 workers will be let go.

The company is also reshuffling its leadership team as part of the initiative. Louie Pastor, Xerox’s former chief legal officer, is returning as chief transformation and administrative officer to lead the new global business services unit. In conjunction, chief operating officer John Bruno has been appointed to “lead the enterprise alignment” of the company’s core printer business and other divisions. 

Photo: Xerox