One year after being acquired by an Asian consortium, Lexmark International Inc (NYSE:LXK) has announced a major restructuring program, one that will result in 700 of its 10,000 employees worldwide being laid off. The layoffs signal continued challenges for the Lexington, KY-based printer maker.
Jerry Grasso, a company spokesperson, said the layoffs will work “to align company talent with our strategy to ensure future success.”
Grasso did not say where the layoffs were coming from, but about 2,300 people, or roughly one quarter of the company, works out of the Lexmark facility in Lexington.
The layoffs are part of a tumultuous couple of years for Lexmark.
In April 2016, Lexmark announced it was being acquired by an Asian investment consortium, led by Apex Technology Co. and PAG Asia Capital. The all-cash transaction was worth $3.6 billion, or $40.50 per share.
The sale, which was unanimously approved by Lexmark’s Board of Directors, removed Lexmark from the New York Stock Exchange and put it into private hands.
Paul Rooke, Chairman and CEO of Lexmark, left the company after the acquisition was finalized in November 2016. Rooke was succeeded by David Reeder. He resigned unexpectedly in June 2017, citing “personal reasons.”
In July 2017, Lexmark sold off its enterprise software business (Perceptive Software) to Thoma Bravo, a private equity firm. Lexmark initially bought Perceptive Software in 2010 for $280.0 million. It wasn’t smooth sailing. In January 2017, Lexmark announced it was laying off 320 employees, or 10% of its software business workforce.
With the sale of Perceptive Software, Lexmark became, once again, solely a printer company.
Troubles continue to follow Lexmark. On July 20, a lawsuit was filed in the United States District Court in New York, alleging that Lexmark “made false and misleading statements” about demand, inventory, and growth prospects for its supplies business in 2014-2015. It is alleged that these false statements cost shareholders more than half a billion dollars.
The lawsuit was filed by the Oklahoma Firefighters Pension and Retirement System. Defendants in the suit include Lexmark, Rooke, Reeder, Gary Stromquist (who had been an interim chief financial officer), and Martin Canning, a former executive vice president and president.
“Lexmark announces 700 layoffs worldwide over next year,” Lexington Herald Leader, August 8, 2017.
“Lexmark agrees to be acquired by Apex Technology and PAG Asia Capital,” Lexmark International, April 19, 2017.
“Lexmark announces completion of acquisition by Apex Technology and PAG Asia Capital,” Lexmark International, November 29, 2017.
“Lexmark announces resignation of president and chief executive officer,” Lexmark International, June 14, 2017.
“Thoma Bravo Completes Acquisition of Lexmark’s Enterprise Software Business,” Thoma Bravo, July 10, 2017.
“Labaton Sucharow LLP Files Class Action Lawsuit on Behalf of Lexmark International, Inc. Investors,” Global News Wire, July 21, 2017.