Lexmark International has announced restructuring actions which will see the elimination of 1,700 jobs worldwide, as well as the end of its inkjet hardware production. The company will instead focus on “higher value imaging and software.”
“Today’s announcement represents difficult decisions, which are necessary to drive improved profitability and significant savings,” said Paul Rooke, Lexmark Chairman and Chief Executive Officer. “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.”
Lexmark will close its Cebu, Philippines, inkjet supplies manufacturing facility by the end of 2015. Inkjet development will also cease by the end of 2013 and its inkjet technology holdings will be put on sale.
According to Lexmark, these cuts are expected to generate $85 million in savings in 2013, growing to annualized savings of $95 million by 2015. The total program pre-tax cost for these actions is expected to be $160 million, with $110 million incurred in 2012, $30 million incurred in 2013, and the remaining $20 million incurred in 2014 and 2015. The total program cash flow impact for these actions is expected to be $75 million.