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KODAK FACES CHARGES & SAYS 16,600 JOBS MUST GO

Eastman Kodak Co, the giant US photographic company which is rapidly losing ground to arch Japanese rival Fuji Photo Film Co, has upped its fourth quarter restructuring charge from $1bn to a breath taking $1.5bn; and it now says 16,600 jobs will have to go. The number of eliminations scheduled has increased by 6,600 from estimates made just a month ago, bringing total staff cuts to 19,900 since 1996; around 20% of the workforce. Of the newly estimated total, 4,800 will loose their jobs by Christmas and the remainder will go in 1998. Severance costs form the majority of the $1.5bn restructuring charge, which the company says will save it around $1bn in annual costs. The news follows an earlier blow for Kodak when at the start of December the World Trade Organization ruled against the US company and in favor of Fuji Photo Film regarding Kodak’s claims of protectionism and lack of fair access to the big Japanese film market. Kodak has watched its margins in the domestic US film market slide away as it responds to Fuji’s price cuts and increasing market share. The job cuts have also found their way into Kodak’s digital products division, despite the company’s conviction that this is where the future of the photo industry lies. Kodak has a large order backlog for its DC120 and DC210 digital stills cameras, which each sport a one million pixel array and which sell in the US for less than $1000. The company is apparently manufacturing around the clock on these units but Kodak will soon face some extreme competition here from consumer electronics mass producers like Japan’s Casio Computer Co and Sony Corp. Kodak’s shares rose $2.31 to $58.81 on the news that the company was taking its medicine.

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CBR Staff Writer

CBR Online legacy content.