Xerox CEO, an Obama appointee

The only prior indicator that changes were ahead at Xerox was an internal webcast previously this year describing a plan to cut some innovation and development engineering costs to one-third of current levels, the affected employee said. Asked about that, McKee said, "we have never said we would reduce R&D spend." The company has said "that we will be shifting our revenue mix to a higher percentage of services, a business in other words targeted to grow between 6 and 8% by 2012. To support that, we have evidently indicated our R&D focus will as well shift to a services-led, innovation-driven business."

He added, "More than half of our revenue now comes from services, we will continue to shift R&D to support the direction the company is moving in."

Huge impact on what happens to former Xerox employees

Burns will have a "huge impact" on what happens to former Xerox employees," said Ron Hira, an associate professor of public policy at the Rochester Institute of Innovation who has testified in Congress about the impact of outsourcing. Among the things Xerox will control is how many employees are retained and how many will be transferred to HCL.

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