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Lexmark to Stop Making Inkjet Printers And Cut 1,700 Jobs
Lexmark, the US printer maker, is to stop making inkjet printers and cut about 1,700 jobs as part of a restructuring.The company said it was exploring the sale of its inkjet-related technology, Reuters reports, and plans to close its manufacturing plant in the Philippines by 2015.
Lexmark has been phasing out inkjet printers to focus on laser printers and it has also been beefing up its print services through several acquisitions, Reuters reports.
Paul Rooke, Lexmark chairman and chief executive officer, said: “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 organization."
Revenue from the legacy inkjet hardware business dropped 66pc in the first half of 2012, forcing the company to cut its full-year forecast.
Most printer makers are struggling with falling sales as printing, considered one of the most dispensable parts of a company’s budget, is always the first target of cost cutting.
The company said on Tuesday that it will take a pre-tax charge of $160m (£100m) related to the restructuring, with $110m incurred in 2012, and the remaining in the next three years.
It expects to make annual savings of $95m once the restructuring is complete.
Lexmark, which had about 13,300 employees worldwide at the end of last year, said it will continue to provide service, support and aftermarket supplies for its inkjet printers.
The company also plans to an additional $100m share buyback in the second half of 2012.
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