Kodak Cuts Deeper Another 6,600 Workers Expected To Lose Their Jobs

Eastman Kodak Co.’s plans for competing more profitably in the photographic products market include cutting 6,600 more jobs than the 10,000 positions it had previously said would be axed.

The camera and film maker disclosed Thursday that its plans for reducing its annual costs by $1 billion will mean elimination of 16,600 jobs, or about 16.5 percent of its work force.

Kodak is restructuring as it is caught in a price war with rival Fuji Photo Film and is still trying to make money from its venture into the emerging field of digital photography.

Last month, Kodak Chief Executive George Fisher announced the latest in a series of overhauls dating to 1983 in hopes of cutting costs, reviving sluggish sales and lifting the company’s stock price.

But Wall Street sent Kodak shares lower after that announcement.

“George Fisher indicated in November that he was embarrassed and mad at what was happening and said it was not going to happen again,” said Gary Schneider, an analyst with Bear Stearns.

He said Fisher is showing with the latest announcement that “he is dead serious about making Kodak a low-cost, world-class company.”

Its board said it would charge $1.5 billion against earnings for restructuring and revaluing certain assets. The company still expects the restructuring to save $1 billion annually by 1999.

Kodak’s price war with Tokyo-based Fuji intensified this summer when Fuji slashed color-film prices by as much as 30 percent in the United States. Kodak is also struggling to turn a profit in electronic photography.

The company expects a 25 percent slide in profits this year.

“We have greater confidence and clarity in Kodak’s ability to cut costs than we did before,” said Morgan Stanley analyst Rebecca Runkle. But she said the company still faced difficulties.

“Film pricing remains a huge unknown, as does the question of when Kodak will become profitable in digital,” she said.

About half of the $1.5 billion charge represents separation payments to be made to departing employees. The other half will cover asset write-downs and other costs associated with the overhaul, the company said.

The 16,600 announced job cuts, combined with previously announced reductions, bring the total number of positions Kodak will eliminate by the end of 1999 to 19,900, Kodak spokesman Charles Smith said.

About 8,700 of those jobs will be lost in the United States, and 11,200 elsewhere around the world, he said.

The announcement was sobering news in Rochester, where about 6,300 of the 34,000 employees at Kodak’s headquarters will lose their jobs.

Chris Harris has worked for Kodak 24 years and wonders what the new year will bring. He said he understands Kodak’s need to be competitive.

“It’s like taking foul-tasting medicine,” he said. “You might not like doing it but it might be the right thing to do.”