Xerox To Close About Half Of XBS Offices: Sources

Xerox is in the process of closing many of its 186 Xerox Business Solutions field offices, forcing sales teams to work remote, and laying off support staff, as part of a massive consolidation, sources told CRN.

Two sources with knowledge of the restructuring said the company plans to close roughly half of the XBS physical locations across the country, keeping the 40 geographical “core” businesses intact but shuttering many of the smaller field offices.

XBS - which the company describes as its “SMB channel” for North America - is responsible for 22-percent of what it calls “channel sales,” with indirect sellers accounting for 37-percent.

[RELATED: Xerox Ousts Channel Chief Amid Big Reorganization]

One source said the manager of one core office in California that has 10 field offices was told last Tuesday that he had to close five of them. “I was told half of physical locations will close,” the source said. “It seems like they are trying to keep it quiet. I was told they are letting people know over the phone.”

The sources said the office closures are part of move to reduce overhead costs and increase profitability. “Since GIS is being folded into XBS, they have been looking at the number of GIS offices,” the source said. “I assume this is part of the strategic plan for Xerox to show more profit.”

One of the affected office workers who spoke with CRN said the staff was called into a meeting last week where a senior manager from Xerox explained on a speaker phone what was going to happen.

“We were told that sales would remain, but the office staff would be let go,” she said. “The sales team is going to work remotely and report to the regional office.”

The worker said her location will be closed in May, and multiple support persons would be let go after that date.

Xerox spokeswoman Caroline Gransee-Linsey refused to discuss the office closures or potential job losses. Instead, Gransee-Linsey, issued a statement saying Xerox planned to grow sales teams within the XBS unit.

“As discussed during our Investor Day, we shared that XBS is an important part of Xerox’s three-year strategy. While we have plans to reduce our global real estate footprint to ensure our facilities meet our operational goals, we also have plans to grow the XBS sales team.” Gransee-Linsey wrote in an email.

Until last month, the XBS Business had been called Global Imaging Solutions. The XBS teams report to Xerox’s North American sales unit, but are not independent resellers. In fact, in some cases, the XBS teams compete with independent Xerox resellers.

News of the consolidations comes just two weeks after the company announced it was transferring some 28,000 small and mid sized government accounts to XBS.

At the investors day on Feb. 5 Xerox CEO John Visentin highlighted the importance of XBS.

“You’ve heard us in the past talk about GIS, and how GIS was and still is a successful part of our organization. So what did we do? GIS became XBS. We took what they do best, which is the last touch to the client, and we asked them to be our SMB channel for North America. So we transferred 28,000 of our SMB accounts into GIS and are now naming it Xerox Business Solutions. Because the mechanism is there to go penetrate, XPS, penetrate our SMB clients.”

Another source said in their area Xerox is closing nine offices. The source said each is small with three to five employees per office.