Lexmark International Inc plans to eliminate 1,700 jobs, shut a plant in the Philippines, and explore a sale of its inkjet technology, as part of the US printer manufacturer's plan to restructure the company to boost profitability.

The Lexington, Kentucky-based company that makes printing and imaging products, including laser and inkjet printers, will no longer manufacture business inkjet hardware, and reduce its workforce by around 13 per cent.

The restructuring moves are expected to bring in savings of $95 million annually, but Lexmark said that it will continue to provide service, support and aftermarket supplies for its inkjet installed base. 

"Today's announcement represents difficult decisions, which are necessary to drive improved profitability and significant savings," said Paul Rooke, Lexmark chairman and CEO.

"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,'' he added.

The restructuring is expected to result in reductions primarily in inkjet-related infrastructure as well as positions in research and development, supply chain and other support functions, including 1,100 manufacturing jobs.  

The job cuts will cost the company $160 million, with $110 million of that this year. 

Lexmark will close its inkjet supplies manufacturing facility at Cebu in the Philippines by the end of 2015, and eliminate inkjet development worldwide, including costs related to facilities, tooling, equipment, contract termination, and scrapping in process inventory, which are expected to be complete by the end of 2013.

The company said that it is working with its strategic advisors to explore the sale of its inkjet-related technology.

Lexmark, which was formed in 1991 when IBM divested its printer and printer supply operations to investment firm Clayton & Dubilier, said that it also plans to repurchase an additional $100 million of stock in the third and fourth quarters as part of its goal to return more than 50 per cent of free cash flow to shareholders.