IKON Axes Business Document Unit
MALVERN, PA—In a move aimed at reducing costs, increasing productivity and improving operating income, IKON Office Solutions is exiting the business document services (BDS) game.
The BDS was one of three IKON sectors to be impacted. IKON will trim the number of legal document services sites from 82 to 65, and has sold substantially all of its operations in Mexico. IKON will also eliminate approximately 1,500 company jobs throughout North America.
The move to abandon BDS—a provider of off-site document management solutions for businesses, including outsourced digital printing and fulfillment services—resulted from the continued industry commoditization, according to IKON. In the end, the company felt the segment did not offer the company an attractive revenue and profitability model.
"We are dedicated to making IKON the strongest independent channel in our industry," notes Matthew Espe, chairman and CEO of IKON Office Solutions. "By exiting non-strategic businesses, rationalizing our structure in legal document services and streamlining our field and corporate organizations, we are creating a cost-competitive infrastructure and focusing our resources and energy on key areas of profitable growth."
The total pretax charges for the restructuring are estimated to be in the range of $38 million to $52 million.