Lexmark announced Tuesday that it will stop making inkjet printers, focusing instead on laser printers, which are used predominantly in businesses.
The decision will lead to a factory closure in the Philippines by the end of 2015. Combined with other job cuts, Lexmark will get rid of 1,700 jobs worldwide, the company said in a release.
Shares of the company rose on the news, jumping over 15 percent for a high of $22.75 as investors welcomed the news that the company would get out of the faltering consumer inkjet printer market.
Revenues for the division of Lexmark that includes inkjet printers and supplies fell 35 percent as compared with the same period of time last year, the company reported last month, far more than the 9 percent declines the company saw with its laser and business inkjet department.
The company’s moves to get out of what it calls the “legacy” business are hardly a surprise, given the rise of e-filing, e-faxing, paperless receipts and online banking. Still, for Lexmark, the decision to pull out of the legacy business was not an easy one.
“Today’s announcement represents difficult decisions, which are necessary to drive improved profitability and significant savings,” said Paul Rooke, Lexmark chairman and chief executive officer, in a company statement. “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.
Many have compared Lexmark’s latest move to a similar announcement from Kodak, which said last week that it would sell its camera-film business to focus on its scanning and, yes, printing services. The company filed for bankruptcy in January, and has been trying to sell its patent portfolio for months.
Both announcements seem more final than another announcement from a company looking to pivot away from its legacy business: Hewlett-Packard. HP’s decision to get out of the PC business was reversed in a little under a month this past October — shortly after CEO Meg Whitman took over at the company.