Advertisement - Click to support our sponsors.
Xerox CEO forced out
Bloomberg NewsSTAMFORD, Conn. -- Xerox Corp. Chief Executive Richard Thoman was ousted today after little more than a year as CEO, the Financial Times reported, following a sales-force reorganization that hurt earnings.
Xerox made an official announcement after the stock market closed that Chairman Paul A. Allaire would be returning as chief executive and would continue as chairman for the next two years.
The board promoted Anne M. Mulcahy to the position of president and chief operating officer, and nominated her for election to the board at the annual shareholders meeting next Thursday in place of Thoman. Allaire announced that he would lead a four-member Office of the Chairman, which includes Mulcahy and Vice Chairmen William Buehler and Barry Romeril.
Thoman, 55, was lured from his job as chief financial officer at IBM Corp. in June 1997 to be president and chief operating officer at the world's biggest maker of copiers. Married and the father of six children, Thoman was groomed for the CEO job and was named to the post in April 1999. At that time, he was credited with cutting costs and boosting revenue by entering new markets.
Thoman stumbled in a January 1999 plan to reorganize 15,000 salespeople along product lines rather than geography. The company said it retrained too many workers at once, which cut into sales. At the same time, the company reorganized its billing centers, forcing salespeople to return from the field to iron out billing problems instead of selling machines and service contracts.
Xerox shares fell $2 to close at $25.50 today.
Allaire wrote to senior executives in December supporting Thoman after the company said fourth-quarter earnings would be well below of analysts' estimates. Fourth-quarter profit fell by 52 percent, to $294 million. A first-quarter charge of $463 million to cover the elimination of 5,200 jobs and other changes gave the company a final loss of $243 million in the period. In March, Stamford, Conn.-based Xerox said it would cut 5,200 jobs, or 5.3 percent of its work force, after three quarters of falling profit and a drop in its stock price of almost 60 percent from a high of about 63 last May.
The company has cut 10,000 jobs -- about 10 percent of its payroll at the time --since 1998.
