Lexmark to lay off 1,700 employees
Printer vendor exits inkjet business
Lexmark International has revealed that it plans to lay off 1,700 staff and exit the inkjet printer business, as part of a major restructuring for the printer vendor.
The company said exiting the remaining business inkjet hardware will improve profitability and expects this decision to result in ongoing annualised savings of $95 million.
Lexmark has stated that it will continue to service and support its existing inkjet customer base.
"Today's announcement represents difficult decisions, which are necessary to drive improved profitability and significant savings," said Paul Rooke, Lexmark chairman and CEO, in a statement. "Our investments are focused on higher-value imaging and software solutions, and we believe the synergies between imaging and the emerging software elements of our business will continue to drive growth across the organisation."
"As we move forward, we remain confident in our strategy, competitiveness and ability to create value for shareholders," added Rooke.
The restructuring actions are expected to result in reductions primarily in inkjet-related infrastructure as well as positions in research and development (R&D), supply chain and other support functions.
The closing of the inkjet business includes the shutdown of a manufacturing plant in the Phillippines by the end of 2015, said Lexamrk. Among the 1,700 jobs being lost are about 1,100 manufacturing jobs, according to the company.
Lexmark said it expects to save about $85 million by the end of 2013 and reach $95 million in savings by 2015.
Lexmark has been one of the poorer-performing tech stocks of 2012. The company's shares are down more than 40% since the beginning of the year to $19.01.
Last year, Lexmark executives said the company was transforming and focusing more on software integration, enterprise content management and business content management.