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 user 2009-01-28 at 3:58:27 pm Views: 54
  • #21071
    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
    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

    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

    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.

    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.