Xerox-People Problems

INTRODUCTION
The word "xerox" is commonly used as a synonym for "photocopy For e.g. I xeroxed the document and placed it on your desk. First Manually operated commercial xerographic copier(1949) Changed its name in 1958 to Haloid Xerox Inc 1961: The company became Xerox Corporation after wide acceptance of the Xerox 914 1990s- turned its product into a service, providing a complete "document service" to companies Today: Xerox today manufactures and sells a wide variety of office and production equipment

Loopholes
Ignored new entrants like Canon, Ricoh Operating cost was high Products of relatively inferior quality compared to its competitors Return on assets came down to less than 8% and market share in copier came down sharply from 86% in1974 to just 17% in 1984 In 1982,David T. Kearns took over as the CEO Average cost of Japanese machines was 40-50% of that of Xerox

Measures taken Launching a program referred to as Leadership through Quality Management layers were cut

Greater authority delegated to lower levels and employees were allowed to participate in decision making
In 1980s Xerox bought Kurzweil, Datacopy and Ventura companies that specialized in optical character recognition, scanning and fax machines It also diversified into financial services, insurance and investment banking Allaire succeeded Kearns as the new CEO in 1990 In 1992 Xerox entered into various tie-ups with Dell Computer Corporation and Microsoft Company announced a major restructuring program including a 10% reduction in the workforce

Impact of the Measures Undertaken

In 1993 Xerox announced a company wide initiative to reduce costs drastically and improve productivity It indicated that it would reduce the world-wide workforce by more than 10,000 and close a number of operations This restructuring program achieved cost savings of $ 770 million in1996 In 1998 Xerox announced another round of worldwide restructuring, including elimination of 9000 jobs through VRS, layoffs and closing of various facilities This program included cutting costs by $ 1 billion, sale of $ 2-4 billion worth of assets

In the same year, Thoman replaced Allaire as the CEO though Allaire continued as chairman
Despite these restructuring efforts, poor market conditions resulted in the company reporting a loss of $257 million in 2000

 People Problems 1 Chairman Joseph C. Wilson, his successor Kearns formed positive culture People oriented tradition that became famous for its training, development and sales selection policies. HR Policy 1980 - Xerox faced a stiff competition from Canon and Ricoh in the low end copier business Developments in Xerox: Allaire replaces Kearns as the CEO in 1990 Reid an integral part of HR function left organisation Replaced by William F. Buehler who had just 2years of HR experience culture of employee involvement seemed to be disappearing

Employees promotions were not carried out as per the company policies People with good relations with the top management were being promoted Xerox kept loosing its top employees and found hard to attract new as well The Change Thomas took control of the company Found severe lapses in HR control systems (eg. No parameters to measure per employee income) Xerox had lost its focus from customer service

People Problems 2 THOMANS REORGANIZATION PLAN Focus Areas: Digital equipment Digital solutions Industry-based targets Results: Commissions reduced significantly. Sales representatives began losing their accounts. Sales staff attrition increased by 100%. No proper training Further Decisions Large scale layoffs 1)12000 employees. 2)4500 employees Reactions Strongly opposed. Thoman had to leave Xerox

Claim of Media Reports Allaire had not been able to let go of the companys control

Allaires in circle consisting of Mulcahyand Buelher threatened to resign if Thoman continued

Reason of failure Employee involvement. Thomans responsibility

Mulchays Efforts Retention Programs- Increasing pay- Increasing incentives Training and education- e-learning Got in touch personally with employees

Results Attrition rate dropped to normal Fall in profitability continued Requirements - Downsizing- Cost-cutting

Reported a loss of $384 million for the year 2000

Loss of $94million in 2001. By Jan 2001,stock dropped by 72% Reported to be on the brink of bankruptcy A $345 million credit from GE capital helped. Dec 2001, total revenues fell by12% to $16.5 billion. Net loss rose by 18% to $342million. Company sources attributed this to- global economic meltdown- higher income tax rate

Turnaround
Strategies Adopted Innovation- spending on R&D- 4 global research centres Pushing into services Adaptive and opportunistic Layoff Outsourcing Value to customers

Thank You !!