Changes at Xerox

Struggling to turn around the giant, Xerox's Chief Executive G. Richard Thoman, has resigned under pressure after only a year at the post. A year ago, hopes were strong for a Xerox breakout in the New Economy fueled by a generation of highpowered digital machines that were unique and selling strong. Those hope were dashed by new competition, a slowdown in big corporate purchases, and the rapid proliferation of the computer printer.

Xerox Corps new leadership plans to move quickly to fix the problems facing the copier giant. Morale is being singled out for special attention by Paul A. Allaire, Xerox's chairman, who returned to the chief executive's post after the ouster of G. Richard Thoman. Allaire and Anne A. Mulcahy the recently promoted president, will "win the hearts and minds of our people." Mulcahy said she would go on a "road show" visiting Xerox employees and customers in a bid to boost morale and win over disgruntled customers. However, Xerox also said the Allaire and Mulcahy plan to continue cost reductions implemented by Thoman, cuts that have stirred much employee unrest. Thoman's ouster came after a first quarter in which revenue rose an anemic 3% to $4.43 billion. Operating income dropped more than 30% to $381 million. The company also took a $533 million pretax restructuring charge, partly to cut about 5,200 jobs, about 5% of the work force.