KENTUCKY : LEXMARK OF LAY-OFF 160
KENTUCKY : LEXMARK OF LAY-OFF 160
2009-01-28 at 3:57:52 pm #20923
Lexmark job cuts include nearly 160 in Lexington
Lexmark earnings fall 82% as sales weaken
Job cuts would have meant quarterly loss without tax boost
Lexmark International will cut or transfer nearly 160 jobs at its Lexington headquarters as part of its fifth restructuring or work-force reduction in as many years.Company officials confirmed the number to the Herald-Leader on Tuesday as they discussed fourth-quarter earnings, which would have been a loss because of the restructuring’s costs if not for a one-time tax benefit. They did not elaborate on precisely which divisions in Lexington would be affected.
The total restructuring will see printermaker Lexmark cut 250 jobs and transfer roughly 125 more to lower-cost countries in coming months. Affected areas around the globe include the company’s supply chain – the way products get to customers – and sales support, as well as its finance and information-technology divisions. Finance, in particular, will continue its consolidation into shared-service centers in locations such as the Philippines and Argentina, chief executive Paul Curlander said two weeks ago when Lexmark announced the
The company’s sales and marketing team also is being realigned. It’s likely that the sales streamlining might be related to a cut in late November of a reported 60 sales and marketing managers and staff spread across the globe, including some in Lexington. Curlander has also said the company will consolidate some product-development programs in research and development.
Going forward, that will reduce Lexmark’s employment in Lexington to around 2,840 people, though the company has traditionally employed about a thousand contractors on top of that number. The company is Lexington’s second-largest private employer, behind St. Joseph Healthcare, and is the only Fortune 500 company based in Lexington. It does no manufacturing in Lexington, instead concentrating its ink and toner production at company-owned facilities in Mexico and the Philippines. Manufacturing of its printers is done by contractors primarily in China. Most of its administrative functions and high-end research and development is done in Lexington. It has invested heavily in recent years in the Philippines, where it does some research and development, and last year opened a second large office building. Worldwide, Lexmark employed about 13,800 at the beginning of 2008.
With the costs of the restructuring factored in, Lexmark reported a loss before taxes of $5.1 million for the quarter. But a favorable tax benefit of $23.2 million boosted the bottom line to a profit of $18.1 million for the quarter. That’s down from $99 million in the same quarter a year ago.In the fourth quarter, revenue fell 17 percent to $1.08 from $1.31 billion a year ago, as the company was hurt by “global economic weakness and significant currency rate shifts,” executives said in a Tuesday morning statement.Fourth-quarter earnings per share were 23 cents, down from $1.04 in the same period a year ago. Without restructuring and other one-time charges, earnings would have been 75 cents a share, down from $1.29 comparably a year ago.
The company on Tuesday also released figures for its inkjet and laser printer divisions. The laser printer division, long the most stable of the two divisions, saw revenue fall 10 percent to $718 million compared to the fourth quarter of 2007. Revenue for the inkjet division, which has struggled since 2005, fell 28 percent to $366 million.For the full year, Lexmark’s revenue was $4.53 billion, down 9 percent from $4.97 billion. Laser division revenue fell 1 percent to $2.98 billion, while inkjet revenue dropped 22 percent to $1.55 billion. Full-year profit was $240.2 million, down from $300.8 million in 2007.