Ursula Burns, the first African American woman to run a Fortune 500 company, will step down as chief executive when the struggling technology and services company splits itself in two later this year, Xerox announced Friday.
Burns, who has spent her entire career at Xerox, is to become chairman of the printer, copier and document technology company created from the split, the company said. The other new company is to focus on business services; Xerox has yet to name a chief executive for either.
“Our search for leadership is well underway and we have an extremely strong pool of talent across our organization as well as external candidates to build our management teams," Burns said in a statement.
The news represents a backward step for diversity at the top of Corporate America. Following Xerox's split, there will no longer be an African-American female CEO at the helm of one of the largest U.S. corporations unless a black woman is soon named to lead one of them. Burns' departure from the CEO role would also leave the current count of female CEOs in the S&P 500 at just 23, and with very few minorities: PepsiCo CEO Indra Nooyi was born in India, but women of color remain rare in the corporate suite. Just 2.8 percent of directors on Fortune 500 boards are black, Latina or Asian women, according to the nonprofit research organization Catalyst.
The news follows a first-quarter earnings report from Xerox that showed profits shrinking 85 percent at the company long associated with photocopier; it also noted break-up costs would be more than expected. The company has been shedding workers, cutting 8,300 jobs in the first quarter, as it prepares to split the company in two by the end of 2016.
The decision to break up the 109-year-old corporate icon unwound a deal Burns had championed early in her tenure as CEO, when she made the bet in 2009 to acquire Affiliated Computer Services, pushing the company into back-office services for governments and businesses. Splitting the company in two amounted to a reversal of the strategy she had orchestrated, and was a decision the company said it made after a review by the board. Activist investor Carl Icahn, who will get three seats on the services company's board after the split, had been pressuring change at the company, but Burns said in January he did not drive the decision.
Though she will continue to lead one of the new companies' boards, the job change closes a chapter in Burns' career, which began 35 years ago when she joined Xerox as an engineering intern in 1980. Raised in the public housing projects on Manhattan's Lower East Side, she has written that "many people told me I had three strikes against me: I was black. I was a girl. And I was poor." Yet she went on to earn two engineering degrees, rise through the ranks at Xerox, and become a trusted lieutenant to her predecessor, Anne Mulcahy.
When she was named CEO in 2009, she became not only the first African-American female to be CEO of a Fortune 500 company. The succession from Mulcahy to Burns also marked the first time there had been a woman-to-woman hand-off at the top of a major U.S. public corporation.
Back in January, Burns said she had urged the board not to think about her future as it considered its options. She reiterated those thoughts on Friday, speaking at the company's annual meeting, according to the Wall Street Journal: “My decision-making process has been grounded in making the best decision for Xerox and for me, personally, in that order,” she said.