Xerox's CEO is assuring Wall Street that the company is focused on improving its financial performance. And that could include a few thousand positions being cut on a worldwide basis.
That second quarter saw a sharp drop in profits for Xerox, mainly due to restructuring of the government health care business. The company earned $12 million in the quarter, down from $266 million last year. That was expected, and earnings per share of 22-cents met expectations.
Sales were down about 7 percent, partly due to currency fluctuations in other countries.
CEO Ursula Burns told the investment community on Friday the company knows it has work to do in some parts of the business.
"We are making progress in some areas, we know we can and should do better in other areas. Our direction is unchanged, but we are making several shifts in the way we execute against it."
Burns said on a conference call that, "We are accelerating cost reduction actions and re-prioritizing investments in the second half to position the business for stronger financial performance while investing in the parts of the business that are critical to drive productivity and future growth."
Xerox does plan to do some cost cutting to improve its financial performance. The company is talking about cutting 3,000 positions worldwide in the third quarter in its services business.
A company spokesman says it's too early to say how many of those cuts might impact Rochester. But he does note that most of Xerox's services’ employees are in other parts of the country. A lot of the Xerox operation in the Rochester area involves the technology business but there are some people on the services side here.
At Brighton Securities, George Conboy says Xerox is facing competitive challenges in the services business.
"They’ll need to fix that business or buy themselves another business and if they keep buying back their own stock, they won't have the capital to do it."
Burns does say that Xerox feels it's overall strategy is still the right one.
"We remain committed to our business strategy and we are bullish about the markets that we serve and the opportunities that lie ahead"
