Lexmark to cut 550 jobs, remains mum on future in earnings release

Lexmark’s release Tuesday of its fourth-quarter earnings continued to reflect the company’s struggle to reinvent itself and brought the announcement of a trimming of 550 jobs in its work force.

Lexmark spokesman Jerry Grasso wouldn’t comment on how many of the affected employees would be in Lexington.

Lexmark officials were not available to discuss quarterly earnings, citing a “quiet period” related to consideration of the company’s future.

The 550 jobs will be eliminated over the next year, according to a news release from Lexmark, with “a portion of these positions being shifted to low-cost countries.” Lexmark has 14,000 employees, about 2,300 of them in Lexington. The company is among Lexington’s largest private employers.

The company’s restructuring will save the company $67 million in 2016 and $100 million a year in 2017 and beyond, the news release said.

The low-cost countries were not identified. Lexmark fired hundreds of workers in late 2015 at its plant in Juarez, Mexico, in the midst of a labor dispute. Workers there were being paid a maximum of just over $4 dollars a day.

Although Lexmark embarked on an aggressive plan to buy software companies to broaden its appeal as a business information company rather than simply a printer maker, the company announced in late 2015 that it was exploring “strategic alternatives to enhance shareholder value.” Those could include a sale of the entire company or a spinoff of part of the company.

Fourth-quarter revenue was down from $1.023 billion to $969 million, but gross profit margin of 39.8 percent was up from 35.2 percent in the same period in 2014.

Earnings per share were $1.16 in 2015, up slightly from $1.14 in 2014.

This story was originally published February 23, 2016 at 11:33 AM with the headline "Lexmark to cut 550 jobs, remains mum on future in earnings release."