Lexmark Cuts Workforce, Discontinues Inkjet Printers

[maysmith]

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In an effort to cut costs, Lexmark says it will cut 1,700 jobs including 1,100 manufacturing jobs. The company will also stop manufacturing inkjet printers while increasing its focus on business supplies and software services including laser printers, Businessweek reports.

Second Restructuring in a Year

The move marks Lexmark’s second organizational restructuring in less than a year. The company announced it would also close a Philippines supply plant before 2015. The company expects these changes to save $85 million next year, and $95 million within the next two years.

As the European economic crisis continues to deplete the demand for inkjet printers, the company’s second quarter results were far less than expected on Wall Street. Since making the announcement regarding the culling of the workforce and shuttering the Philippines’ plant, stocks surged for the company for its biggest gains since mid-2011, Bloomberg reports.

Lexmark’s Chief Executive Officer Paul Rooke said in a statement, “Today’s announcement represents difficult decisions, which are necessary to drive improved profitability. Our investments are focused on higher value imaging and software solutions.”

Printer manufacturer Canon Inc., and Xerox Corp., have also cut earnings forecasts for the year, all saying decreased European sales have had a detrimental effect on sales forecasts.

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