Lexmark to Streamline, Move Jobs to 'Lower-cost Countries'

Amid declining revenue and a consumer business that has been under heavy pressure, Lexmark said Tuesday it would restructure its operations globally in move that would impact 1,650 jobs. The company reported earnings that were better than expected for the third quarter, but were still down from a year ago.

In its earnings statement, the company said the restructuring would save about $20 million in 2007 and $70 million in 2008 and would be wide-ranging.

The actions would impact more than 10 percent of Lexmark's entire workforce.

"These actions are expected to impact approximately 1,650 positions by the end of 2008. Most of the impacted positions are being moved to lower-cost countries," Lexmark said. The company said it would shutter an inkjet supplies facility in Mexico and streamline operations globally with its supply chain, service, administrative and marketing and sales support.

For its third quarter, Lexmark reported that it turned in revenue of $1.195 billion, slightly above the average of Wall Street analysts forecasts, according to Thomson Financial. The Lexington, Kentucky-based company also reported 48 cents of earnings per share, well ahead of the 13 cents per share that analysts had, on average, expected. Still, that marked a decline of three percent of revenue compared to the year-ago quarter and the earnings per share of 85 cents that Lexmark reported for the third quarter of 2006, the company said.

In a statement, Lexmark CEO Paul Curlander said the company's business segment - - which operates largely through solution providers -- continued to meet expectations, but its consumer business continued to be a drag on its overall operations. Curlander said the company would continue to make strategic investments in its branding and product development.

Lexmark executives were expected to provide additional detail in a conference call with financial analysts Tuesday morning.

The announcement continues what has been a difficult year for Lexmark, as sales of its printers to other vendors via its OEM business has dropped off dramatically and its consumer business -- particularly the once-lucrative inkjet supplies business -- stumbled. Curlander has also overseen a significant shuffling of his top executives, including the move of Paul Rooke from the post of president of its printing and service unit to its consumer business, and the promotion of Marty Canning to replace Rooke.

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