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Lexmark Decide to Cut Inkjet Business Worldwide
2012-09-04 11:40:57

On August 29, 2012, Lexmark announced a $160 million restructuring plan that involves exiting its remaining inkjet hardware business (including business inkjet), closing a plant in the Philippines that produces inkjet supplies, and cutting 1,700 jobs worldwide. The company is exploring the sale of its inkjet-related technology (they have approximately 1,000 inkjet-related patents), though it will continue to service and support its installed base of inkjet printers.

The goal is to drive improved profitability and cost savings; once these moves are fully implemented (2015), they are expected to save Lexmark $95 million a year. Lexmark is also anticipating an operating margin of 11%-13% for 2013 and beyond. According to Lexmark Chairman and Chief Executive Officer Paul Rooke, Lexmark’s future investments will focus on higher value imaging and software solutions, including laser workgroup devices, managed print services, document management-related software, and industry-specific solutions.

Most of the job losses will be in inkjet manufacturing (1,100 positions), though positions in research and development, supply chain, and other support functions will also be affected. Lexmark plans to eliminate inkjet development worldwide, including costs related to facilities, tools, equipment, contract termination, and scrapping in process inventory, by the end of 2013, while they expect to close the inkjet supplies plant by the end of 2015 (although they will continue to ensure that ink cartridges will be available to users of their devices well beyond 2015).

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