Lexmark to Exit the Inkjet Printer Business
Lexmark, one of the traditional big four printer manufacturers along with HP, Canon and Epson has just announced that it will be exiting the inkjet business by the end of 2015. In an announcement today Lexmark said it will exit its inkjet printer business and cut 1,700 jobs around the world in a move to save roughly $95 million annually.
The company was formed when IBM spun off its printer division and over the years it has tried many different routes to market, including manufacturing printers for Dell and Samsung, but has suffered recently in tough trading conditions with Kodak overtaking it in consumer sales in Europe.
Specifically, Lexmark said it will cut jobs related to inkjet manufacturing, development and support. The company will close its Cebu, Philippines manufacturing facility by the end of 2015. This 380,000 square-foot facility, the newest addition to Lexmark's manufacturing sites in Asia, supplies inkjet cartridges to the growing Asian market, as well as supplementing the U.S. market.
That closure will eliminate 1,100 manufacturing jobs. Another 600 jobs will be lost as inkjet development is terminated by the end of 2013 the company added that it is also looking into a sale of its inkjet technology.
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The company is intending to refocus onto its software services and Managed Print Service (MPS) offerings, where it bought Perceptive Software in 2010, which provides software and services used to manage documents, workflows, imaging, and other content. Last month, the company reported much weaker than expected quarterly results on a drop in demand in Europe and a strong dollar, and cut its full year forecast, pushing down its shares to a two-year low.
"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."