Lexmark says it will downsize by 1,700 jobs in restructuring to explore more of the inkjet market

Lexmark, the printer makers, announced on Monday that they will probe deeper into the inkjet printer market more and will undergo downsizing by a volume of 1,700 jobs. The company has seen a slow growth in consumer and corporate market and its share price has paid the toll.

Lexmark, trading under LXK has seen a decrease in its stock by 30 percent this fiscal term. However, the news brought some life to its stock as it jumped 10 percent in the early trading on Tuesday.

The company announced that it will halt production at its Philippines-based plant by 2015 for good and will also shave off funding on the research and development projects in addition to supply chain and support services. Officials stated that all this is being done to realize a $95 Million profit per annum.

“Today’s announcement represents difficult decisions, which are necessary to drive improved profitability and significant savings,” Lexmark CEO Paul Rooke said in a statement. “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.”

The printer market, as all other PC-related peripherals and components, has seen a downward trend in demand of late. Inkjet printers, in particular, have seen a slow growth, though they are most purchase of the printer family.

Companies like Hewlett-Packard, Lexmark and Canon have failed to churn substantial profits in the consumer market and have been relying mostly on ink refills. However, that has not been as profitable as one would suspect.

In case of HP, the market has done little to less than stellar profitability. Though there is a lack of demand in the market, the company is going through organizational restructuring. Earlier this year, HP stated that it will move from PC/Printer business model to a more diversified enterprise solutions company. Its profit fell 3 percent to $6 Billion from the year-earlier quarter.

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Posted by Usman Khalid on Aug 30 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.