Abstract

In 1999, the revenues of Xerox Corp (Xerox), the world's largest photocopier maker, began to fall, and in 2000 it reported a loss of $273 million. Xerox also lost $20 billion in stock market value (from April 1999 to May 2000). Xerox cited many reasons for its bad performance including the huge reorganization effort initiated by the then CEO, Richard Thoman. In May 2000, he was replaced by his predecessor Paul Allaire, and Anne Mulcahy (Mulcahy) was made COO. Xerox revealed a Turnaround Programme in December 2000, which included cutting $1 billion in costs, and raising up to $4 billion through the sale of assets, exiting non-core businesses and lay-offs. Subsequently, in August 2001, Mulcahy was made CEO. Xerox continued to report losses in 2001, but it returned to profit in 2002 and continued to report profits in 2003. The case examines the events that led to the decline of Xerox, and in particular how major reorganization strategies can affect a company.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Turnaround Strategies
• Change Management
• Leadership
• Outsourcing.

Keywords

Xerox Corp., G. Richard Thoman, Paul Allaire, Anne Mulcahy, Rank Xerox, Fuji Xerox, Xerox Channels Group, Change Management, Leadership, Turnaround, Xerox Engineering Systems, PARC, Outsourcing, SEC, Photocopier Manufacturer