Burns, who is the company's president, will take the new position starting July 1. Mulcahy will remain chairman of Xerox's board.

Burns joined Xerox in 1980 and previously was responsible for running parts of Xerox's successful printer business. She also held roles in the manufacturing, supply chain, marketing and research operations. Burns was named president in April 2007 and is currently managing the company's internal operations.

She takes over a financially stronger Xerox than when Mulcahy took the helm as CEO in 2001. Mulcahy was praised for her role in turning Xerox around financially and for revitalizing the flagging digital imaging business with new products and services. Mulcahy was also responsible for establishing Xerox Global Services, which offers document and images services. That unit generated US$3.5 billion [B] in revenue last year. Mulcahy spent 33 years with Xerox working in various departments.

The new CEO also faces the challenge of guiding Xerox through the recession as companies hold back spending on printing equipment and supplies. Xerox last month reported revenue of $3.55 billion [B] for the first quarter of 2009, an 18 percent decline from $4.33 billion [B] in the first quarter of 2008. However, it reported a profit of $49 million [M] for the period, an improvement from losses of $244 million [M] the previous year. In October, Xerox said it would lay off 3,000 people over six months in an effort to cut costs.