Rochester, N.Y. – Kodak became the latest casualty of the recession, paring back its payroll as it reported a fourth-quarter loss of $137 million.
To stanch the bleeding, Kodak said it would curb executive payouts from its long-term equity program and would freeze salary increases in 2009. The company will also slash between 3,500 and 4,500 positions globally or between 14 to 18 percent of its workforce. The cuts will occur by the first half of the year, Kodak said.
Kodak’s sales slumped 24 percent to $2.4 billion, including a 23 percent decline in digital sales to $1.8 billion and a 27 percent drop in traditional revenues to $652 million vs. the year ago quarter.
Kodak ended 2008 down 9 percent in revenue with earnings of $54 million, although the outcome is preliminary as the company said it was still assessing several “goodwill and long-lived assets.” Digital revenues for the year dropped 4 percent while traditional revenue slid 18 percent.
“The second half of 2008 will go down in history as one of the most challenging periods we have seen in decades,” said Antonio Perez, chairman/CEO in a statement announcing the earnings. Perez cited “dramatic declines in several of our key businesses due to the slowdown in consumer spending and significantly reduced demand for capital equipment” as contributing to Kodak’s performance.
Sales from the consumer digital imaging group fell 5 percent for the year to $3 billion and decreased a sharp 30 percent in the fourth quarter vs. the prior year’s quarter. The group posted a $40 million loss for the quarter.