Eastman Kodak Co. said Thursday it is cutting as many as 3,000 more jobs as it completes a historic, four-year transformation this fall into a digital-imaging company focused on consumer photography and commercial printing.
On top of 25,000 to 27,000 layoffs targeted since 2004, Kodak is reducing its payroll even further to accommodate last month's $2.35 billion sale of its health-imaging unit.
"The dream was that we would wake up in 2008 with the digital company that we want to have. We're still right on that track," Antonio Perez, Kodak's chief executive, said at an annual meeting of Kodak analysts and institutional investors.
"We will finish this year. This is done. ... This is the last year of restructuring."
The company that put film cameras into most homes in America acknowledged in September 2003 that its analog businesses were in irreversible decline. It outlined an ambitious strategy to invest in new digital markets dominated by entrenched heavyweights such as Hewlett-Packard Co., Seiko Epson Corp. and Canon Inc.
As it battled to outpace the drop in demand for film, its century-old cash cow, Kodak embarked on a nearly $3 billion shopping spree but also ran up $2 billion in net losses over eight consecutive quarters. It finally hauled in a modest $16 million profit in the October-December period when, for the first time, it generated more earnings from digital than from film, paper and other chemical-based businesses.
It is now eliminating 28,000 to 30,000 jobs by year-end, with 23,300 already axed. And the sale of its 111-year-old health unit - intended to help fund its bold leap into the inkjet printer market - will strip another 8,100 jobs. That will shrink its payroll to around 30,000, its lowest level since the 1930s.
"As one big unit leaves, obviously there's not as much revenue or earnings, or as much support, and that has to be adjusted for," Kodak spokesman Gerard Meuchner
The cuts will bring extra restructuring charges of $400 million to $600 million, or total charges of $3.6 billion to $3.8 billion since 2004.
"By the end of the third quarter, basically my hope is that we're done with all the announcements of restructurings and jobs and everything else and we're just fully concentrated on growing" more than a dozen digital ventures from cameras and online photo services to high-volume printing presses, Perez said in an interview.
"If you look in the history books, you will see this is one of the hardest transformations to do," said Perez, a native of Spain who was hired by Rochester-based Kodak in 2003 from Hewlett-Packard, where he helped build an inkjet printer behemoth that he now aims to tackle head-on.
"We had $3 billion in assets associated with film. You cannot disassemble that that easily. ... It's a long ride but we all believe that we have enough assets, enough know-how and enough commitment from our employees to keep going. We're going to be a smaller company but a much better company, and we're going to start growing again, especially in 2008 but starting in 2007," he said.
While Kodak remains the world's top maker of photographic film, Perez doesn't discount someday discarding the storied business that George Eastman launched in 1881.
"Film is going to follow its own destiny," he said. "Right now, entertainment (motion-picture) imaging is very stable, is very good for the company. ... If that goes digital, which eventually I believe it will, then we'll do something else. We will do what's better for the shareholders."
While Kodak's transition to a new world of photography was hindered by a reluctance to phase out film - it created the world's first digital camera in 1975 but only began selling mass-market digital cameras in 2001 - the company didn't lag behind in research, amassing more than 1,000 digital-imaging patents.