@kx well, it is not exactly what's happening. If supplies are purchased by dealers, they are purchased at dealer price. When it happens, distributors sell from stock and are compensated from Xerox (listprice-dealerprice) in 1/2 months. Of course, this is not good fr a financial perspective but it is necessary when distributors stocks are much high and distributors start complaining. Overall it is a crazy game of moving and refilling while increasing the overall amount. I have feedbacks from dealers receiving such offers: if Xerox stop selling printers stocks cover up to 2 years of demand. So you can figure out how critical it is... It is not just a matter of creating a safety buffer...
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@hh Too many contractual obligations that require physical bodies or back office positions that are still necessary only due to years of non-investment in operational efficiencies.
@j3 Sounds like trying to get supplies in the hands of partners knowing that there are inevitable “supply chain disruptions” on the horizon.
Just realized I wrote 'tax rates'. Of course It was meant to be 'interest rates'
BTW, should any Xerox executive read this, thinking I am sharing 'secreta': everything is clear in the quarterly report:
1) massive revenue increase (50%) with reduce cost increase. This is typical if an excess of toner is sold to mitigate HW sales (which is usually a loss). Toners cost almost nothing (few dollars per item) and are sold with fantastic margin
2) Detailed statements of toner sales increase (+166% vs previous quarter). This generated 300+M$ versus previous quarter.
I am just surprised none of the analysts investigated this...but maybe they are not aware about the overall business model...
@hh So, there are a number of reason to avoid 'mass layoffs'. Let me first inform tou I spent many years as a manager in the organization. First of all whenever you cut roles, you need to reorganise processes. You can't simply remove positions - each process needs an alternative to be prepared. 2) Employees are located in different jurisdictions. If you want to avoid legal legal actions you need to follow certain rules/timing. Of course Xerox doesn't want to pass the message to the market which is in a critical situations. They rather prefer to share it is a well planned activity, thought it is more expensive. As shared, they are collecting some money selling huge amount of toners with massive discounts - this is just like borrowing money from wholesalers. It will not work, but gives them some room to play more. the dark side is they'll fall from blinding heights rather than 2nd floor. As you can imagine, increasing tax rates will force partners to ask for more money to cover the stock. And, anyway, whenever they'll feel they can satisfy toner needs for several years even if Xerox crash, they will stop to increase the stock, and Xerox will explode in one quarter with revenue=zero...
@hr makes sense
@hh That is exactly how you can tell nobody is seriously working on surviving. It’s over.
@hh do they even have the cash to pay out that much severance
@ee There aren't any left over here! All moved to the Phillipines, pay cheap get cheap
@bv question - my understanding is that Xerox doesn’t make any money - no profit - however we wanna call it. But if you are trying to reduce costs, wouldn’t the obvious mechanism be do mass layofffs? Wouldn’t you want to go from 22k to 15k or something? I’m not a financial expert but if you are a negative and losses are daily to me that means there is no margin of profit - so wouldn’t try e normal thing be to reduce costs with mass layoffs to reduce the gap? Not seeing how the sporadic reductions every quarter or similar are helping -
@e8 employees in the form of layoffs
So, What do they plan to Pawn in Q3?
Outrageous! That money could have gone to the Dividend! BOD just “declared” a quarterly dividend of $0.025 per share? That is NOT an increase…. Next time customs asks, “Do you have anything to declare?” Why yes, I do…Increase the Dividend!
877 CASH NOWWWWWWW
It is exactly what it looks like: a desperate attempt for postponing what is mathematically sure: Xerox will never be able to change anything. Printing is a well known market. I know product costs, supplies cost/profits, etc. It is not possible to recover that debt. They can tweak numbers but, at the end, they'll pay the full price. Apart from tariffs refund Xerox is only selling a lot of toners proposing huge rebates to the channel/wholesalers. Such toner is sold at list price minus a fee to pay wholesalers stock. Once the toner is sold the difference between list prive and end-reseller price is reimbursed to the partner and, at that moment, the impact of early rebates hit like a hammer. You might say it is foxy but this is going on for several quarters and every time Xerox needs to pay more to convince partners to increase stock. Stocks are already huge and, at some point, partners will not order more and the world will understand Xerox already sold 1 or 2 years of toners in advance... It will go this way, you like it or not.