Rochester, N.Y. – Kodak announced yesterday it would reduce its worldwide workforce by 20 percent, between an estimated 12,000 and 15,000 jobs, in its continuing effort to better reposition the film stalwart in the digital age.
The reductions, expected to take three years and save Kodak between $800 million to $1 billion by 2007, will bring the total, worldwide work force down to roughly 50,000 employees – the smallest number since the 1940s, according to a company spokesman. The company had as many as 145,300 employees in 1988 when, according to a spokesman, it ‘owned every market it participated in.’
With the advent of digital imaging, however, the film-based Titanic has been forced into a series of internal realignments, managerial shifts and product category moves that are steadily steering the film giant out of the weakening film current and into the steadier digital stream.
People will not be the only Kodak property on the cutting board. The company plans to reduce its worldwide office and manufacturing footprint by one third through consolidation, demolition and leasing.
Last week, Kodak announced it was pulling out of the APS film camera business worldwide and the 35mm film camera business in the U.S., Canada, and Western Europe by the end of 2004. It will, however, continue to support both film formats with new introductions worldwide in 2004. For the full-year 2003, the company estimated that worldwide consumer film industry volumes declined by about 8 percent.
Kodak pointed to a silver lining in its reported 83 percent fall in fourth quarter net income: the increase in sales of its consumer digital business. The EasyShare digital camera lineup notched an 87 percent sales increase. The company also reported an 11 percent increase in inkjet paper sales and a 55 percent increase in online photofinishing sales from its Ofoto Web-site.
As part of the accelerated restructuring, Kodak also launched a $35 million tender offer to buy the remaining shares that it does not own in the Japanese digital camera supplier Chinon Industries. Kodak plans to consolidate its Japanese research and development operations with those of Chinon, the company said.