TOKYO -- Five leading office equipment makers in the global market, including Ricoh and Canon, cut their combined payrolls by about 16,000 between January and September, mostly overseas, as demand for their products slumped due to the coronavirus pandemic, Nikkei has learned.
Ricoh eliminated about 6,400 jobs through voluntary retirements of sales and maintenance personnel overseas, and by consolidating manufacturing after it opened a new factory in China in July.
Canon dismissed about 4,100 employees during the same period, including sales staff for its office equipment and cameras business in Europe and the U.S. It also cut positions by combining business units overseas, such those providing maintenance.
Konica Minolta shed about 2,700 workers, while Xerox of the U.S. and Fujifilm Holdings let go about 1,500 and 900 employees, respectively.
The total number of job cuts is equal to around 4% of all employees at the five big companies and 7% of workers in their office equipment businesses.
Demand for printers and copiers was already on the decline as businesses shift from paper to digital documents. Then, as the pandemic hit, many companies ordered staff to work from home, further depressing demand.
Japanese corporations have been rethinking how they use offices. Vaio, a personal computer maker based in Nagano Prefecture, said Tuesday that it relocated its Tokyo office where it conducts sales and marketing. The new office only has about 20 seats even though there are roughly 60 workers, and it has been designed with flexibility in mind, allowing employees to use it for online conferences or other tasks depending on need.
On top of the shift to remote work, the coronavirus hampered business talks due to office closures. According to U.S. market researcher IDC, 2.46 million A3 multifunction printers sold from January to September, down 22% from the same period a year earlier. As demand for printing fell, so has demand for supplies such as ink cartridges, and maintenance.
In contrast, demand for inkjet printers has been strong as consumers printed work documents and educational materials at home. Sales of such devices rose 14% to 16.75 million units during the July-September quarter.
Canon grew its inkjet-related sales by 21% during the July-September quarter by releasing products allowing easy printing of company documents. Seiko Epson increased its supplies partly through outsourcing even though it was forced to suspend plant operations.
However, inkjets do not contribute much to the companies' bottom lines because the market is relatively small. Canon projects a 26.9 billion yen ($257 million) increase in inkjet-related sales but a 132.6 billion yen plunge in sales of multifunction printers for the year ending Dec. 31. Other multifunction printer makers handle very few home-use products.
Earnings are expected to slump despite the personnel cuts by the companies in response to a shrinking market. Ricoh is seen logging a 14.2 billion yen net loss for the October-March half. Canon will halve its annual dividend to 80 yen, the first decline in 33 years.
The market is shrinking faster as remote work becomes the norm. Konica Minolta sees printing volume recovering in fiscal 2021 to about 90% of the fiscal 2019 level, but forecasts a decline afterward.
"A major industry shakeup is needed, such as factory closures and the forming of partnerships," said a brokerage analyst.
Japanese players have been strong in multifunction printers and inkjets because of the need to combine technologies in multiple fields, including precision machining, optics, chemicals and electronics. Stable profits from recurring revenue, such as maintenance and toner sales, have kept companies from restructuring but calls for industry realignment could grow if the market contracts further due to the pandemic.