Xerox spinoff Conduent posts loss, won't complete NY work

• Some charges stem from a project the company does not plan to fully implement with the state.

The former business services arm of Xerox Corp. posted, in its first earnings report as a standalone company, a large loss partly due to an incomplete project with New York state.

Conduent, which broke off into a $6.4 billion business from Xerox on Jan. 1, reported a $935 million goodwill impairment charge, along with a $161 million noncash charge related to a Health Enterprise platform project with the state.

Conduent, which employs roughly 600 in the Rochester area, said it would not fully implement the project with the state, and was in discussions to back out of the work entirely.

Xerox was plagued by issues with similar projects for other states over processing of Medicaid enrollments, claims, payments and other related work.

Total losses in Conduent's 2016 non-adjusted earnings amounted to about $1.2 billion. Revenue for the year was down 4 percent to $6.4 billion and down 13 percent to $1.5 billion in the fourth quarter, its last under the Xerox umbrella.

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"We have a lot of work ahead to fully realize a new operating model and vision for success," Conduent CEO Ashok Vemuri told investors Wednesday morning. "We have an aggressive change agenda and will make continual productive change a facet of our culture and leadership approach.

"We are taking important steps to streamline our businesses."

He said during the call that the company is looking to deliver $700 million in cost savings and operational efficiencies, with a majority of those efforts coming later this year.

"We are making steady progress on priority and identifying on the aggressive goals in the programs," he said. "These savings are being comprised over every aspect of our company. This work is having an immediate impact."

The company, Vemuri said, had shed roughly 5,000 jobs since the end of last year, with total employment standing at 91,000 on Feb. 15, as part of efforts to reduce costs.

A company spokesman said Rochester-area employment has remained consistent since the split with Xerox.

TCLAUSEN@Gannett.com