Magazine article Workforce Management

Xerox-Acs Deal Latest Shake-Up in Hro Market

Magazine article Workforce Management

Xerox-Acs Deal Latest Shake-Up in Hro Market

Article excerpt

HR OUTSOURCING

In another change to the human resources outsourcing landscape, copier maker Xerox said late last month it plans to acquire HRO provider Affiliated Computer Services.

The cash-and-stock deal, valued at $6.4 billion, comes in the wake of news in July that Hewlett-Packard's ExcellerateHRO division is exiting HR business process outsourcing. Xerox also is the latest technology hardware company to buy a business services firm, after HP snapped up EDS and Dell said it will buy Perot Systems.

"The hardware players are having to get into business services in order to find ways to boost margins," says Neil McEwen, managing consultant at advisory firm PA Consulting.

Dallas-based Affiliated Computer Services, known as ACS, employs 74,000 people. It offers business process outsourcing services in areas including finance, information technology and human resources. For the year ended June 30, ACS reported revenue of $6.5 billion and net income of $350 million.

Norwalk, Connecticut-based Xerox is most famous for its copy machines but also provides document management consulting and outsourcing services. The 54,000-employee company posted $230 million in net income on revenue of $17.6 billion in 2008.

"By combining Xerox's strengths in document technology with ACS' expertise in managing and automating work processes, we're creating a new class of solution provider," Xerox CEO Ursula Burns said in a statement. …

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