Xerox is a widely known firm worldwide, but it has been through numerous crises in the past decade. In fact, at one point several years ago, there were questions about Xerox surviving as a firm. But no longer. Under the leadership of Anne Mulcahy as CEO, Xerox has rebounded. Numerous strategic business and financial decisions had to be made, including reducing the workforce by 30,000. But Mulcahy also stressed that HR had to become a more strategic contributor.

One of the actions taken was to consolidate a number of HR functions from different business units into a corporate HR Service Center. This center performs many administrative transactions and has added Internet-based systems to make HR services more accessible to managers and employees. To track employees' views on the company and HR, employee surveys on the company intranet have been used for several years. Areas at which lower scores were recorded have been addressed by HR staff and other managers. The survey results have led to another primary focus at Xerox: employee retention. With all of the reductions and organizational restructurings, keeping the remaining employees, especially high-potential ones, has been a continuing emphasis. Xerox has invested significant time and resources into training and development of its employees, an important retention factor. Greater use of e-learning, technology, and leadership development have paid off in reducing turnover and convincing employees that career opportunities exist at Xerox. Continuing competitive pressures are presenting new challenges for Xerox and its HR staff. The strategic importance of HR has been demonstrated in the past and looks to be a part of the firm's future.

1. Discuss the challenges faced by HR management when significant staff cutbacks occur and how they should be addressed.

2. Use of technology, employee retention, and HR development have been at the core of HR becoming more strategic at Xerox. Why have those areas been so key?