BY 2015 Lexmark to lay off 1,100 Cebu workers

CEBU, Philippines - As the printing company struggles with a declining market in the emergence of digital devices, Lexmark International Inc. has to lay off 1,700 positions worldwide of which 1,100 are manufacturing employees in Cebu will be affected by the end of 2015.

Lexmark recently announced its restructuring actions that will include the exiting of the development and manufacturing of the company’s remaining inkjet hardware, reductions in inkjet-related infrastructure and closure of the inkjet supplies manufacturing facility in Mactan Economic Zone II in Basak, Lapu-Lapu City.

Such actions are expected to generate $85 million savings in 2013, increasing to ongoing annualized savings of $95 million beginning in 2015.

The company also expects a total program pre-tax cost of $160 million with a total cash cost of $75 million.

RL Bandy, President and Chief Executive Officer of Lexmark Research and Development Corp., told the local media that the rising popularity of smartphones and tablets has resulted in the decreased usage rate of computer printers nowadays.

He added that for the company to stay strong amid the competition, Lexmark has to shift its business from hardware-centric to an end-to-end solutions company.

“The world is changing. This is where the business is growing. We have been a leader of printing solutions and now, we are driving to the business world deeper with end-to-end solutions. We are taking this hard decision right now to be a strong company in the future and stay ahead. We’re doing this for the future of Lexmark,” he stated.

 Acquisitions of software companies to help spur Lexmark’s evolution included Perceptive Software, Pallas Athena, Brainware Inc., ISYS Search Software and Nolij Corp.

Of the 13,300 employees on the company payroll at the start of 2012 worldwide, Bandy cited that there is an estimated number of 3,000 employees in Cebu.

He then clarified that the strategic change of the company is not based on the performance of its workers and even considered Cebu as the largest area of employees globally.

He further described Cebuano employees as innovative, creative and hardworking.

Lexmark International (Philippines) Inc. President and Chief Executive Officer Robert Keith Gerwig, on the other hand, said that business will remain as usual and continue to produce printing products in the next three years.

“Lexmark is a kind of company that is really concerned of the health and overall emotional response of the employees in this difficult time. Cebu will remain one of the top key cities of Lexmark and be part of its strategy in the foreseeable future beyond 2015,” he added.

Minchu Decena, Human Resources Director of Lexmark International (Philippines) Inc., said that the company has been conducting employee-based adjustment approaches such as counseling, organizational activities, team building and one-on-one and group meetings of employees with managers to help the workers to condition themselves of what is going to happen.

She further cited that internal positions in the company will be offered to the manufacturing workers and see if their skills can match their qualifications.

Lexmark, she added, will also activate its particular networks with other companies to provide additional job opportunities.

 “We know that this will have a ripple effect to the employees of entire Lexmark but we would be taking care of them. We want them to be safe. We will make sure our employees would feel good to be a part of our company whether they leave or stay. After all, this is one whole Lexmark, one whole Cebu,” she said.

She noted that the 1,100 employees in Cebu that will be laid off are those working as operators, engineers, finance and operations personnel in the plant.

In earlier reports, the decision to leave the inkjet printer industry was based on the company’s report of a 61 percent decline in its earnings for the last quarter.      - THE FREEMAN