Lexmark International Inc. announced plans Tuesday to cut 500 jobs worldwide after reporting lower earnings for the second quarter.
The Lexington-based printer and software company said it took in $891 million in the quarter, down from $894 million during the same period in 2014. Earnings per share also fell, to 97 cents from 99 cents.
Lexmark CEO Paul Rooke said the restructuring — including the job losses — is a result of recent high-profile acquisitions.
Chief among these were the recent purchase of two software companies: Sweden-based ReadSoft and California-based Kofax Ltd.
The job cuts “had nothing to do with this quarter and everything to do with the purchases,” Rooke said.
Rooke pointed to brighter spots in the quarterly report, notably to what he called “solid growth in our higher-value” divisions, including software and business solutions.
“When you look at it ... we had good, solid growth in our software business, a record quarter really,” Rooke said. He noted that these divisions are key to Lexmark’s strategy as it pivots its focus from just printers more toward software and solutions.
Still, the earnings reports and news of jobs cuts weren't greeted warmly on Wall Street. The company’s stock price was down midday by more than 20 percent.
The Kofax deal in particular looked likely to produce job overlap. That deal was valued at $1 billion and essentially doubled the size of Lexmark’s Enterprise Software division.
Rooke said the cuts would come from a variety of disciplines, from administrative to engineering to marketing, and that it would affect its worldwide workforce of 12,000 to 13,000 workers.
“We think the impact will be fairly nominal locally,” he said of job losses for the Lexington area.
Included in the restructuring plan is a decision to halt share repurchases for 18 to 24 months. Rooke tied that decision to the Kofax deal as well, noting that the company had used a lot of its non-U.S. cash reserves.