Lexmark to exit inkjet printer market
Lexmark to close manufacturing plant, cut 1,700 jobs in restructuring
Lexmark will stop making inkjet printers and cut 1,700 jobs as part of a cost-cutting restructuring move.
The US company has struggled to compete in an inkjet market dominated by Canon and HP. Earlier this year, it began to shift its focus away from consumer inkjets by quietly withdrawing from high street stores such as PC World.
Lexmark will stop all inkjet development worldwide by 2013, and close its Philippines-based inkjet supplies manufacturing plant by 2015. This will provide annual savings of $85 million, rising to $95 million by 2015. The total restructuring cost before tax is expected to be $160 million.
The company is also looking into the possible sale of its inkjet-related technology.
"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. The move will allow Lexmark to focus on "higher value imaging and software solutions" and the "synergies between imaging and the emerging software elements of our business".
Lexmark also announced plans for an additional $100 million of share repurchases before the end of this year.
Lexmark has made advances in its inkjet technology in recent years, but remains some way behind Canon and HP both in the quality of its devices and in sales.
Experiments with innovative form-factors aside, Lexmark has concentrated on pushing an app-like experience on its inkjets, with smartphone-style touchscreen interfaces.
More recently, its OfficeEdge devices successfully blurred the line between inkjet and laser output - albeit at a high price.
Lexmark will continue to provide service, support and aftermarket supplies for its inkjet owners, while it concentrates on more successful laser products.