Payroll Math and why we are at the end

OK, here is the money crunch. There was ~$479,000,000 in cash or equivalents on the books on 9/30/25.

Great! (not really)

There are also 27,000 people on payroll. Divide the numbers and you get $17,740 per person. Great? No, not really.

Some people make a lot, some make terrible money. If the mean salary is $50,000/year and you divide that into $17,740, you get 35.4% of a year - or about 90 days of payroll.

Money is coming in still but this, and overhead, the cost of goods, and most importantly, the debt load, is too much to survive. The only way they can survive is to borrow money and they can't. It's too late to fire their way out of this, hence the lack of trying.

There are two smaller debt payments (both around $100 mil) due this year. Either one could end the ballgame.

#BudgetCuts #Debt #EmployeeRelations #FinancialResults #Layoffs

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You’re done completely now. Maybe a job at Goodwill or Purple Heart veterans might be in order. Maybe the peace corps is a possibility as well.

Time to work for free people.

You definitely didn't retire from xerox finance, even they aren't that d-mb

Of course a goodwill write down makes the financial results worse. Its an asset determined to be worth less than is value on the balance sheet. Credit asset debit income by the amount of the adjustment resulting in less assets and a higher loss.

@e9 understood thanks for the clarification. Now we just wait and see how these numbers turn out - all eyes will on them I’m sure.

@dr write downs for goodwill are accounting and don’t impact free cash flow. Xerox had to write down PARC in Q3 2024 had it on the books at 1 billion and gave it STI foe $0.00 so forcing write down. Xerox can have a GAP accounting loss in a Quarter and at same time bring in $200M in cash flow

@bn good info so a question from someone who knows sh-t about corporate financing. All the talk of goodwill impairment which I believe must be reported in Q4 - is this in anyway related to the free cash flow as mentioned on this thread? Is there an inherent risk that the adjustment in goodwill will make the financial results worse? I acknowledge this is maybe a non related matter but thought to ask.

@bh Having retired from Xerox in finance within the last 24 months; you are spot on with your response (line item for debt reserves, yoy and qtr cash flow decline) on observations of books. Agree, Xerox does not exhibit the healthiest of books.. but not quite at the state @be described

@be You started this post acting like payroll can't be made but they made it for the last three quarters burning though free cash flow and have enough free cash flow to left over.

While free cash flow is going down because they have had to use it you could claim that it's been all over the place but from 3rd quarter from 2nd quarter was down 63% burn rate and was down ~50% comparing 3rd quarter from 1st quarter.

Also if they are accounting for the $100mil and setting money aside for the debt payments (which they would be) and hopefully they have set aside the full amount then that wouldn't necessary come out of free cash flow. (I personally have my doubts here but they are smart enough to have a line item to save up these funds).

@be I'm not following this logic "FCF is negative for going on a year now. The 479 Mil is all the money they have in the world as of 3 months ago, and it is probably all gone, based on the burn rate."

They have had 299mil in negative free cash flow for 3 quarters with an average of 99.66 (I'll round up to $100).

So with current cash on hand of 479mil they would have 4.79 quarters left at current burn rate.. so they would have 1 year and 9 months. If no new events cause an increase burn rate of cash on hand.

Which I also don't believe to be the case.. I believe that an increase burn rate will occur but I don't see your logic that it's already gone.

@b8 No, I understand.

https://www.macrotrends.net/stocks/charts/XRX/xerox-holdings/free-cash-flow

I'm talking about cash on hand, not FCF.
FCF is negative the last 3 quarters:

Xerox Holdings Quarterly Free Cash Flow ( in millions)
2025-09-30 -51.00
2025-06-30 -139.00
2025-03-31 -109.00

Assuming they can stop negative FCF (which they can't!) and get that bleed down to 0, they would have around 129 days of payroll with cash on hand - moving forward from 9/30/25 - which is early February. Q4 is usually XRX's best Q of the year for earnings, so they might have some money left for the Jan 30 debt payment, but maybe not.

FCF is negative for going on a year now. The 479 Mil is all the money they have in the world as of 3 months ago, and it is probably all gone, based on the burn rate.

Don't forget the interest expense ~ $320m per year.

Here they go again, trying to sound smart.

I think you mis understand what free cash flow is. Payroll and debts are expenses that are covered by income. The question isn't do you divided debt or payroll by free cash flow the question is how does free cash flow trend over a period of time.

If free cash flow declines because there is less or no free cash flow after expenses are covered then there are problems.

What Is Free Cash Flow (FCF)?
https://www.investopedia.com/terms/f/freecashflow.asp

Free cash flow (FCF) is the amount of cash that a company has left after accounting for spending on operations and capital asset maintenance. Investors and analysts rely on it as one measurement of a company's profitability.

I by no believe that Xerox is in a good financial shape but using the logic that you have posted is not a good way to measure what your trying to measure. I also agree with you that the debt on the book is most likely to sink the ship but until we start seeing cash equivalents being used for expenses then the logic your using is not valid.

The reality is that payroll and debt payments are accounted for before you get to free cash flow. If the cash equivalents need to be used to pay for expenses then we have an issue but that is not what you have stated.

@a5 yawn. 🥱. Give us all a break.
Nothing ever changes with some of you.

You know they say that all men are created equal, but you look at me and you look at Samoa Joe and you can see that statement is not true. See, normally if you go one on one with another wrestler, you got a 50/50 chance of winning. But I'm a genetic freak and I'm not normal! So you got a 25%, AT BEST, at beat me. Then you add Kurt Angle to the mix, your chances of winning drastic go down. See the 3 way at Sacrifice, you got a 33 1/3 chance of winning, but I, I got a 66 and 2/3 chance of winning, because Kurt Angle KNOWS he can't beat me and he's not even gonna try!
So Samoa Joe, you take your 33 1/3 chance, minus my 25% chance and you got an 8 1/3 chance of winning at Sacrifice. But then you take my 75% chance of winning, if we was to go one on one, and then add 66 2/3 per cents, I got 141 2/3 chance of winning at Sacrifice.

Yaaaaaaawnnnnn…..

Correction 129 days.

Thread regarding Xerox Corp. layoffs

Payroll Math and why we are at the end

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