A number of press reports claim that Xerox Corp. (NYSE: XRX) will be broken into two pieces, and that activist investor Carl Icahn, who has taken a significant position in the company’s shares, will receive several board seats. The action is the culmination of several years of falling sales and profits, as well as a collapsed share price, all under the management of CEO Ursula Burns. Appropriately, she may have no role in either of the new corporations at all.

Icahn’s plan apparently is to tear apart Burns’s signature decision. Xerox bought Affiliated Computer Services (ACS) in 2009 for $6.4 billion in cash and stock. Her theory was that Xerox needed to diversify beyond its copier and related hardware businesses. The addition of software and services would increase margins. But the deal never worked.

The ACS purchase pushed total Xerox revenue from $15.2 billion in 2009 to $22.6 billion in 2011. Net income rose from $485 million to $1.3 billion over the same period. By contrast, in the most recent trailing 12 months, Xerox revenue has been $18.4 billion. Net income has dropped to $391 million. These recent results have been so poor that Xerox shares have fallen 30% in the past year.

When Xerox announced results for its most recently reported quarter, revenue had dropped 10% to $4.3 billion. Net income dropped from a profit of $266 million to a loss of $34 million. Services revenue fell 8% to $2.3 billion and yielded a loss. The ACS buyout has dragged down the company’s numbers.

Burns made her usual set of excuses when the numbers were announced:

During the third quarter, the company achieved adjusted earnings in line with our guidance. We continue to focus on strengthening our offering portfolio, improving productivity and targeting our highest-margin segments. We remain focused on serving our clients and leading in the most attractive market segments where we are best positioned to compete and differentiate.

Icahn seems not to believe this. Burns has been CEO since July 2009 and has made tens of millions of dollars. She may well be on her way out.

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