Lexmark to exit the Inkjet printer marketplace Aug 28, 2012 13:09 by John Sollars
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, the company said it will close 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 has tried many different routes to market, including manufacturing printers for Dell and Samsung, but has suffered recently 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 Philippines-based manufacturing facility by the end of 2015 – a closure that will eliminate 1,100 manufacturing jobs, and another 600 jobs will be lost as they intend to terminate ‘inkjet development’ by the end of 2013. The company added that it is also looking into a sale of its inkjet technology.
The company is intending to refocus onto its software services and Managed Print Service (MPS) offerings, having bought Perceptive Software in 2010, which provides software and services used to manage documents, workflows, imaging, and other content. Last month, the company reported quarterly results that were much weaker than expected, due in part to a drop in demand in Europe and a strong dollar; this 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 CEO. “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.”
Lexmark have focussed for the last few years on providing solutions for vertical niches – such as banking, insurance – and, along with their MPS offerings, are aiming the business squarely at the medium and corporate business sectors, having realised that there is very little money to be made in the consumer marketplace.