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Lexmark ditches inkjet hardware in company shake-up

Lexmark has announced that it will shake up the company in a series of moves that primarily involve ending the development and manufacturing of inkjet printer hardware.

It was the second such announcement from a major tech company this week, with Sony publicising its own major restructuring effort on Monday.

Lexmark, which said it will continue to provide service, support, and supplies for its installed inkjets through the end of 2015, expects to save around £60 million annually once the plan is fully implemented, according to a news release.

About 1,700 employees worldwide will be laid off during the process–primarily those in Lexmark's inkjet business unit, as well as some holding positions in research and development, supply chain management, and other support areas.

Lexmark's Philippines-based inkjet supplies manufacturing facility will be shuttered by the end of 2015.

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

By the close of 2013, the company's global inkjet development will be wound down, helping to generate £54 million in savings next year.

A big name in the printer-manufacturing business, Lexmark is turning its focus to laser technology, a direction that Marty Canning, Lexmark executive vice president and president of Imaging Solutions and Services, said makes more sense for the company going forward.

Canning said that Lexmark conducted a major strategy overview and weighed a variety of options, but finally settled on shutting down the inkjet division, which was not providing enough in volume sales to make it a sustainable business.

Other vendors have made similar moves, according to Canning, who said, "I think in these segments where Lexmark is focused, laser technology makes more sense for us."

"We see lots of opportunity to continue to innovate and evolve laser technology," he said. But refusing to rule out a comeback for inkjet technology at Lexmark, the executive admitted, "I would never say never," when asked whether the company may ever return to this kind of production.