Fuji Xerox Australia loses hundreds of staff and wipes off $200 million in revenue

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Fuji Xerox Australia loses hundreds of staff and wipes off $200 million in revenue

A series of tumultuous years have taken their toll on Fuji Xerox Australia, with a significant decline in revenue and a 30 percent reduction in employees.

Fuji Xerox Australia (FXA) generated revenue of $774.7 million for the 12 months to 31 March 2017, according to numbers only recently reported to corporate regulator ASIC.

That was a fall of $120.2 million from its revised 2016 revenue, and a $190 million decline from the near billion-dollar revenue the company originally reported in 2016.

FXA initially reported 2016 revenue of $964.3 million, but was forced to revise that down to $894.9 million following a financial investigation by its parent company that found major discrepancies in its accounting and led to heads rolling in Australia and Japan.

According to FXA's annual reports for 2016 and 2017, the number of people employed by the Australian company and the entities it controls, which include print management business Upstream Print Solutions, fell from 2196 to 1506 in the course of a year, a cutback of 690 staff.

FXA made a $66.1 million net loss in 2017, a deterioration from its revised 2016 net loss of $44.9 million.

FXA, which has its head office in North Ryde, is primarily a direct sales operation and is distinct from Fuji Xerox Printers, a largely separate company based in Frenchs Forest that sells via resellers.

Amid the accounting scandal, eight directors of Fuji Xerox Australia have resigned since the start of the 2017 financial year.

An investigation by its Japanese parent company, Fujifilm, found that Fuji Xerox's Australian and New Zealand subsidiaries had overstated revenue on managed service agreements, brought forward revenue to hit targets, repeatedly avoided recognising losses and fabricated monthly accounting numbers.

The fallout is also apparent in the decline of Fuji Xerox's A3 market share.

Source: IDC Quarterly Hardcopy Peripherals Tracker (units)

According to IDC data, the one-time market leader saw its share of the combined monochrome and colour A3 market almost halve from 38.90 percent in the third-quarter of 2016 to 22 percent in Q3 2017. Konica Minolta overtook Fuji Xerox's market share in the July-September quarter.

Fuji Xerox has sought to tighten up corporate governance as it makes amends for the scandal, including creating a new Australian position of chairman of the board – primarily to oversee local governance.

An FXA spokesperson told CRN: “As we look forward to 2018, Fuji Xerox Australia's focus remains strongly on our customers and employees as well as ensuring the highest standards of corporate governance.

"Over the last 12 months, Fuji Xerox Australia has implemented a robust corporate governance structure to support sustainable and responsible operations.”

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