Kodak Reorganization Could Slice 7K Jobs in ’07

As part of a four-year turnaround plan, Eastman Kodak expects to cut 5,000 to 7,000 jobs by the end of 2007 in an effort to reduce its administrative overhead and boost profits from digital photography instead of standard film, the company told investors Thursday.

Kodak leaders had already cut 1,200 jobs during the fourth quarter of 2006, bringing the total jobs lost to 23,400 since the company first announced its restructuring plan in January 2004. By the end of this year, that total could reach 30,000, nearly half of the company’s size in 2003.

The company has already cut excess jobs from its manufacturing division, and will trim the remaining jobs from its selling, general and administrative unit, Kodak Chief Financial Officer Frank Sklarsky said in a release. The move will reduce administrative overhead from Kodak’s current level of 18 percent of revenue to just 14 percent to 15 percent.

The company has also slashed costs by announcing on Jan. 10 it would sell its 8,100-person medical imaging and health-care IT division to Canadian firm Onex for US$2.55 billion. That deal is expected to close in the first half of 2007.

On the revenue side of its books, Kodak hopes to boost income through new products like its consumer inkjet printers, image sensors and picture kiosks, said CEO Antonio Perez. The company will also draw $250 million in revenue by licensing its intellectual-property patents this year, he said.

Kodak introduced a line of inkjet printers this week to compete with Hewlett-Packard and Xerox. Kodak will target consumers and home-office users by selling replacement ink cartridges at about half the price of its competitors—just $9.99 for black ink and $14.99 for five-color ink. Likewise, Kodak will sell a range of printers priced below $200.

Also on Thursday, Kodak announced it would partner with Mozilla to improve Kodak’s online photo gallery by allowing users to access it from Mozilla’s Firefox Web browser. The companies hope to generate more income from the 83 million U.S. users who are predicted to upload, share and print their photographs by 2010. Users can now download the new tool.

-Ben Ames, IDG News Service (Boston Bureau)

Related Link:

• HP, Kodak Introduce New Inkjet Printers

Check out our CIO News Alerts and Tech Informer pages for more updated news coverage.