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Xerox CEO steps down
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May 11, 2000: 4:30 p.m. ET
Thoman steps down from post after punishing year, company says
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NEW YORK (CNNfn) - Xerox Chief Executive Richard Thoman has resigned from his post less than a year after taking on the job, the company announced late Thursday.
Thoman, who previously served as IBM's chief financial officer, has taken the heat for the slide in Xerox shares, which have fallen about 50 percent in the past year. Investors have criticized him for bungling the company's transition to digital technology.
Paul Allaire, who preceded Thoman as chief executive and currently sits as chairman, will return to the CEO spot and remain chairman for the next two years. Anne Mulcahy was named president and chief operating officer, by Xerox's board of directors.
 Xerox shares fell 2, or just over 7 percent, to 25-1/2 on the New York Stock Exchange, down significantly from their 12-month high of 62-5/8 reached last spring. The company's shares were held in the after-hours session, according to Instinet.
Under Thoman's stewardship, Xerox, one of the pioneers of the electronic office equipment industry, has been struggling to keep up the pace in that rapidly changing business.
Thoman, who joined the company in 1997 as chief operating officer and became chief executive last April, has been faced with the task of reinventing the company, which is best known for its light-lens photocopiers, to adapt to the changing environment.
The company has been moving to adapt its equipment to work with the more modern digital technologies that are at the core of computer network systems and scanning devices.
 Xerox, which also has been hit by the corporate spending slowdown spurred by Y2K concerns and is in the midst of a major revamp of its sales organization, also has been losing share to competitors such as Ikon Office Solutions (IKN: Research, Estimates), Global Imaging Systems (GISX: Research, Estimates) and Danka Business Systems PLC (DANKY: Research, Estimates).
Analysts were not surprised by the news.
"We've been waiting for something to happen in the management ranks in order for them to change their strategy," John Eade, who tracks Xerox for Argus Research, said in an interview on CNNfn Thursday afternoon.
"It seems like they're starting to do that," Eade added.
Though he said investors should expect that the stock would be volatile in the event of a management reshuffle, Eade pointed out that several large companies, which had been in similar situations, have bounced back sharply.
"Xerox has a strong brand name, and billions of dollars of revenue," he said. "We saw Motorola on this kind of parabola a few years ago. Readers Digest had done the same thing. New management comes in, focuses the company, and there's room to run on the stock." 
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