Japan's Fujifilm Holdings said it is cutting 10,000 jobs globally at its joint venture with Xerox to cope with a decline in the photocopying business, amid speculation of a new deal between the two companies.
Fujifilm owns 75 per cent of the joint venture, called Fuji Xerox, which accounts for nearly half of the Japanese company’s sales and operating profit. Fuji Xerox had over 47,000 employees as of March 2017, according to its website, meaning the job cuts would likely slash its workforce by more than a fifth.
The Wall Street Journal reported that Xerox is nearing a deal with Fujifilm Holdings that would cede control of the US photocopier pioneer to its Japanese competitor.
The paper said the deal, to be announced as soon as Wednesday, would combine Xerox with the five-decades-old joint venture it has with Fujifilm. Xerox shareholders would own just under half of the resulting entity and would get an implied premium for their stock and cash, it said.
The talks could still fall apart or the terms could change, the paper said, adding that Xerox shares would continue to trade following any deal.
Fujifilm and Xerox declined to comment on the report.
Xerox employs 650 people in Ireland.
Xerox has been under pressure to find new growth sources as it struggles to reinvent its legacy business amid waning demand for office printing. Fujifilm is also trying to streamline its copier business with a larger focus on document solutions services.
Xerox has been targeted by activist investor Carl Icahn and shareholder Darwin Deason, who joined forces last week to push Xerox to explore strategic options, oust its "old guard", including its chief executive, and negotiate better terms for its decades-long deal with Fujifilm. Mr Icahn is Xerox's biggest shareholder, with a 9.72 per cent stake.
The two firms’ joint venture, Fuji Xerox, was formed in 1962 and has limited prospects as demand for office printing declines.
The joint venture now accounts for nearly half of Fujifilm’s sales and operating profit and sells photocopy products and services in the Asia-Pacific region.
Fujifilm shares were down 0.4 per cent in early morning trade on Wednesday. Xerox shares ended down 0.5 per cent on Tuesday. - Reuters
