Kodak, Posting Loss, Plans More Job Cuts
Near Eastman Kodak headquarters in Rochester, N.Y., a billboard promotes the city. Some of the 7,000 manufacturing jobs to be cut are in Rochester.
(By Kevin Rivoli -- Associated Press)
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Thursday, July 21, 2005
ROCHESTER, N.Y., July 20 -- Eastman Kodak Co. said Wednesday that it will cut as many as 10,000 more jobs as the company makes a tough transition from film to digital photography.
On top of 12,000 to 15,000 layoffs announced 18 months ago, Kodak is reducing its payroll by almost a quarter from where it stood in 2004, when a string of recent acquisitions is taken into account.
The new cuts will include 7,000 manufacturing jobs, many in Kodak's Rochester base.
The company reported a second-quarter loss. Kodak stock fell 64 cents, or 2.2 percent, to close at $28.10.
Kodak missed Wall Street forecasts by a wide margin, largely because of a steeper-than-expected slide in film sales -- even in emerging markets such as China. It lost $146 million in the second quarter, compared with a profit of $136 million in the second quarter last year.
Revenue rose 6 percent, to $3.69 billion.
Kodak plans to make as many as 25,000 job cuts by the middle of 2007. The company also will add about 8,000 employees, however, bringing its workforce to less than 50,000 people.
Kodak in January concluded about $3 billion worth of acquisitions to expand its reach as a digital heavyweight in photography, medical imaging and commercial printing.
With soaring sales and fat profit from chemical-based businesses gone, Kodak expects digital technology to become its biggest source of revenue this year for the first time.
"I don't need to change our overall strategy. The further we get into this, the better the strategy looks," Kodak's new chief executive, Antonio M. Perez, said during a conference call with analysts. "But I need to dramatically accelerate some of the steps needed to get there.
"Although we have been moving rapidly to get our costs down . . . we are picking up the pace dramatically," he said. "This is what the company needs to succeed as a digital company."
In the second quarter, sales of digital products and services in all its businesses rose 43 percent, to $1.84 billion. Revenue from non-digital products dropped 15 percent, to $1.84 billion.
