A shrinking camera market has imaging giant Nikon undergoing a companywide restructuring plan, including reassigning more than 1,500 employees and a new focus on “high-value” cameras. Nikon confirmed early restructuring rumors with an official notice today — but while the initial rumors called for 1,000 layoffs, the employee reduction appears to be only a voluntary early retirement plan at this point.
As part of the imaging division restructuring, Nikon says that the company will “focus on high-value products.” The camera industry as a whole has seen a reduction in the number of point-and-shoot cameras announced, with companies, including Nikon, focusing on products that offer elements well beyond a smartphone’s capabilities, such as cameras with large sensors, interchangeable lenses, long zooms, and rigid waterproofing. Nikon’s statement seems to suggest that the company’s recent focus on high-end products with minimal point-and-shoot offerings will continue.
This year alone, Nikon branched into both the action camera and 360 market with the new KeyMission line, though the cameras experienced a delay due to software. The company’s new DL line of compact zoom cameras, originally slated for a July 2016 release, are still listed as a pre-order item on Amazon. The Kumamoto earthquakes near Nikon manufacturing centers in April also plagued the company through much of the year.
Nikon says the restructuring decision is an effort to make changes while still in a financially strong position. The shrinking camera market along with a negative foreign exchange impact are two of the reasons for for restructuring the company’s imaging division, while newer divisions have not seen their anticipated growth.
The company’s semiconductor lithography branch also hasn’t broken even, which is where 1,000 of those employee “reassignments,” as Nikon calls them, will take place. About 350 staff in the imaging sector and 200 in the company’s headquarters will also be affected by the restructuring. The company plans to offer a voluntary early retirement for 1,000 of those employees. With the statement only including a cost reduction for 1,000 employees, the remaining 550 included in the estimates will likely be reassigned to different areas of the company.
Along with the companywide restructuring, Nikon also announced plans to restructure the manufacturing of optical components. The plan is to enhance the technology of the parts that “are our core competence and a differentiator from our competitors,” the statement says. Essentially, the manufacturing restructure merges several smaller sub companies. Kurobane Nikon, a sub-company manufacturing optics for microscopes, will be absorbed into the larger company structure. The manufacturing changes are expected to take place on February 1, 2017.
The restructuring will reduce annual costs by 20 billion yen, or about 190 million in US currency, with a one-time reduction of 48 billion yen, or about 457 million USD. The company released a statement today saying that there have not been any official announcements for a headcount reduction over the course of several years.
“Although Nikon is constantly studying various management options including headcount rationalization for strengthening the company’s profitability mainly of semiconductor lithography and imaging products businesses, nothing has been decided at this time,” the statement says.