Computer printer maker Lexmark International Inc. (NYSE: LXK) announced today that it will leave the inkjet printer business. The company expects to eliminate its inkjet development by the end of 2013 and to exit the supplies manufacturing business by the end of 2015. Lexmark reckons the company will save $95 million annually once the closures are completed. About 1,700 workers will lose their jobs as a result of the restructuring.
Lexmark’s chairman and CEO said:
Today’s announcement represents difficult decisions, which are necessary to drive improved profitability and significant savings. 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 company plans to continue its recent policy of returning 50% of free cash flow to shareholders through a combination of share buybacks and dividends. Lexmark will spend $100 million in the third and fourth quarters on buybacks and the company’s board has approved a $200 million increase in the share repurchase plan above those purchases.
Of the lost jobs, 1,100 will come at Lexmark’s manufacturing plant in the Philippines.
Lexmark’s shares are trading down about 1.3% in the premarket this morning at $18.76 in a 52-week range of $16.10 to$38.34.