The spin-offs keep spinning.
Friday’s announcement by Xerox that it will separate into two entities caps a lot of spin-off activity of late. This latest, as announced here on USA Today‘s website, will separate the office-equipment giant into two companies, an $11-billion document-technology company and a $7 billion business-services company.
The company says the transaction into two independent publicly-traded companies is expected to be completed by the end of the year.
These “significant actions … define the next chapter of our company,” Chairman and CEO Ursula Burns told the paper in a conference call Friday morning.
This certainly underscores the spin-off mania that Will Bunch’s September cover story in HRE, “Split Decision,” alluded to. His focus, of course, was on the impact these mega-transactions are having on human resource departments and their leaders. As his piece puts it:
“Most of the headlines over the big, high-profile spin-offs — the Hewlett-Packard split, eBay and PayPal, General Electric and its credit-card unit Synchrony Financial, Time-Warner and its publishing unit Time, Sears and Land’s End — have focused on what the moves could mean for investors. But when they say — as in the words of the old Neil Sedaka song — that “breaking up is hard to do,” in the business world they’re probably talking about the HR department.
“Indeed, much of the heavy lifting for these spin-offs — deciding who stays with the old company and who goes, filling vacancies and new positions, making critical decisions about pay and benefits, and fostering employee enthusiasm and answering anxious questions while developing a new, unique culture at the spin-off — falls upon HR executives.”
Although early reports don’t include specifics about the impact this division will have on Xerox’s HR function — now functions, no doubt — Burns did tell the paper that the two post-split companies will be “more flexible, more responsive and essentially more fit and focused for the market that we are attacking.”
The report also notes Xerox’s 140,000 employees worldwide will be divided up thusly: About 104,000 will be part of the business-services outsourcing company and the other 40,000 will make up the document-technology company.
It will be interesting to see how this latest in the spin-off string plays out, especially as it relates to HR. As Bunch notes in his story:
“HR executives who’ve worked through the spin-off process say the biggest personnel changes don’t usually affect the operating infrastructure of two companies — manufacturing and sales, for example — because those functions tend to stay largely intact. It’s a different story, they say, with shared services and in the corporate offices.”