The bad news is that 10,000 Fuji Xerox employees worldwide are about to lose their jobs.
The good news is that the iconic Xerox brand will survive, but the actual business will be merged into a new entity, Fuji Xerox. With Fujifilm Holdings, Inc. taking control of Xerox by purchasing 50.1% of the control stock of the new corporation. Xerox CEO Jeff Jacobson will be the CEO of the new Fuji Xerox with Fujifilm Chairman and CEO Shigetaka Komori assuming the position of chairman.
Of course, the deal is subject to shareholder and regulatory approvals. The company is engaged in a fight with activist investors who believe that Fujifilm is getting a bargain and thus disadvantaging Xerox shareholders.
"FUJIFILM Holdings Corporation announced a revision to its consolidated earnings forecast for the fiscal year ending March 2018. Embedded in the release is the news of the restructuring of Fuji Xerox and will result in the layoff of 10,000 employees worldwide.
Structural reform of Fuji Xerox
The market environment surrounding the Company’s subsidiary Fuji Xerox has grown increasingly severe. In order to win out through the competition going forward and to realize further business growth, a fundamental structural reform will be implemented to attain a sturdy footing by improving profitability and productivity. The specific measures to be implemented as part of the structural reform are as follows:
- reorganization of the domestic and overseas sales structure;
- closures and integrations of manufacturing bases and reorganization of the development structure;
- revision of product lineups aimed at improved business profitability;
- abolition and integration of head office functions and expansion of shared services; and
- compression of fixed assets.
Through these measures, cost reductions of 50 billion yen are expected in and after the fiscal year ending March 2020, including personnel reductions of 10,000 people domestically and overseas."
After struggling with falling demand for copiers and printers over the past two decades, Xerox has few options to grow its business. It appears that Fuji Xerox will expand into high-tech labeling and industrial printing applications.
With Xerox it was all about printing technology, even though its famed PARC (Palo Alto Research Center) was responsible for the development of the mouse, windowing, printer control languages, and development tools – all of which found their way to other companies like Apple, Microsoft, and Adobe that became powerhouses in their respective areas. Xerox still has a potent and magnificent patent portfolio that continues to grow.
As expected, the corporate spin is unimaginative. “The merger ‘will unlock significant growth and productivity opportunities,’ Xerox CEO Jeff Jacobson said in a statement.”