Xerox has announced that it is splitting up into two companies.
The first company will focus on document management. The company will help customers with printing services, payment processing, and paper digitization. That was an $11 billion business for Xerox in 2015.
The second company will help customers outsource key business processes, including HR, customer care and accounting. It will also help customers learn how to automate some of their in house processes.. Xerox brought in $7 billion in sales from its business process outsourcing unit last year.
Xerox says the two companies will become their own entities by the end of 2016. It has not given those companies names or shared who will run each business.
CEO Ursula Burns said the company is splitting up so that it can become leaner and more efficient.
Once completed Xeros says the two companies expect to save $2.4 billion over the next three years.
“I am confident that the extensive structural review we conducted over the last few months has produced the right path forward for our company,” said Burns. “We will now position the companies for success.”
Activist investor Carl Icahn, has been calling for Xerox to split up since revealing he took an 8.1% stake in the company late last year. He will select three of the nine board members to oversee the business processing outsourcing company once the split is complete.
“We applaud Ursula Burns and Xerox’s Board of Directors for recognizing the importance of separating Xerox into two publicly-traded companies,” Icahn said in a statement.
Xerox went public in 1961.