The Fix

We have identified $680 Million in Cost Savings at Xerox. That is roughly 2x current Operating Income.

Where is it?

1. Corporate Obesity ($200M)

Xerox HQ in Connecticut is a sprawling campus. We need a few floors in a shared office. The "Regional VP" structure is a relic of the 1990s. We propose flattening the org chart to 4 layers max.

2. Sales Efficiency ($300M)

Xerox maintains a massive direct sales force to call on SMBs. This is inefficient. HP Inc uses "The Channel" (resellers) to do this. Xerox spends 24.5% of Revenue on SG&A. HP spends 9.8%. We must move SMB sales to the Channel.

3. R&D Discipline ($180M)

We are spending ~$300M on R&D for "Innovation". Stop. The innovation happened in 1959. We need Maintenance Engineering only. Ensure the drivers work on Windows 12. Ensure the security is patched. That costs $100M max.

The Payoff

$680M in savings -> $1B in FCF. 110M Shares. $9.00/share in FCF. At a 10% Yield, the stock is $90. We are conservative. We target $27 (3x FCF).

The upside is asymmetric.