Lexmark International said Tuesday it would cut 550 jobs, or about 4% of its worldwide workforce, as it continues to explore strategic alternatives including a possible sale.
The restructuring, announced along with Lexmark’s fourth-quarter earnings, is intended to increase profitability and operational efficiency primarily in the company’s imaging solutions and services business, which includes its printing divisions.
Some positions are being moved to low-cost countries and Lexmark expects to generate about $67 million in savings in 2016 and $100 million annually starting in 2017.
“The company, like others in the technology industry, has spent years wrestling with a maturing hardware market; unlike many of its competitors, it has worked to stick to its core business and add software around it,” the Wall Street Journal said.
In October, Lexmark hired Goldman Sachs to advise it on its options. “Lexmark is very pleased with both the progress and positive interest in the company’s strategic alternatives process, and is continuing its evaluation,” the company said Monday.
“Lexmark does not intend to comment on the exploration process or disclose further developments until the board approves a specific transaction or otherwise concludes the exploration of strategic alternatives,” it added.
Bloomberg reported last week that Lexmark had attracted first-round bids for its software division from private equity firms Thoma Bravo and Vista Equity Partners and received interest from Canon and Ricoh in its hardware division.
For the fourth quarter, Lexmark reported earnings, on an adjusted basis, that surpassed its expectations, as lower expenses helped to offset a worse-than-expected drop in revenue.
The company lost $10.7 million, or 17 cents a share, for the three months ended Dec. 31, compared with $22.6 million, or 37 cents a share, a year earlier. Revenue slipped 5.3% to $968.8 million.
Up to Monday’s close, Lexmark’s stock had fallen 9.9% over the past three months. It was down nearly 4.4%, at $30, in trading Tuesday.