Cambridge, Mass. – Polaroid will phase out 25 percent of its 8,000-person global workforce over the next 18 months, including 1,000 employees in the United States.
The company will also institute a restructuring program designed to save $175 million to $200 million by the end of 2003. In addition, Polaroid will take a series of restructuring charges this year and next, totaling between $150 million and $175 million, to reduce its cost base. The restructuring will include layoffs, as well as reduction and reconfiguration of Polaroid’s global operations.
Operating results for the second quarter, ended June 30, are likely to be in the area of the operating loss reported in the first quarter, excluding potential one-time charges and real estate gains. Polaroid posted a loss of $38 million in the first quarter, compared with a $9 million gain in the same three months last year.
Sales were down 18 percent in the first quarter, to $331 million, compared to the year-ago first quarter. Sales in the United States were off 2 percent in the first quarter, down to $199 million, compared with the same three months in 2000.
During the first quarter, Polaroid announced its first restructuring plans, including a layoff of 950 employees, or 11 percent of the workforce.
Polaroid cites steeper-than-projected declines in its core instant business as well as the soft economy and competitive growth of digital imaging for its financial woes.
The company’s two-phase restructuring includes managing core instant products for cash and profitability and developing an instant digital printing business with significant opportunity for long-term growth.
