Kodak to slash 3,000 more jobs during '07

NEW YORK — Eastman Kodak Co. is cutting 3,000 more jobs this year as the picture-taking pioneer wraps up its wrenching transformation into a digital-imaging company focused on consumer photography and commercial print- ing.

By year-end, its work force will slip below 30,000, less than half what it was just three years ago.

On top of 27,000 layoffs already targeted, Kodak said Thursday it is reducing its payroll even further to accommodate the $2.35 billion sale in January of its health-imaging unit and its costly foray this week into a high-margin inkjet-printer market dominated by Hewlett Packard Co.

"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," Chief Executive Antonio Perez 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 nearly every home in America acknowledged in 2003 that its analog businesses were in irreversible decline. It outlined a strategy to invest in new digital markets governed by entrenched heavyweights such as HP, Seiko Epson Corp. and Canon Inc.

As it battled to outrun sliding 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 straight quarters. It finally snared a $16 million profit in the October-December period when, for the first time, it earned more from digital than from film, paper and other chemical-based products.

"As far as I'm concerned, Kodak is finally over the negative surprises," said Ulysses Yannas, a broker with Buckman, Buckman & Reid. "They are entering a phase where increasingly profitability starts to show.

"A year or two out from here, it will be a totally different company," with profits driven by an inkjet-printer system that "probably is a lot bigger than anybody thinks it's going to be."

"The inkjet introduction now appears to be a bet-the-company move for Kodak," said George Conboy, president of Brighton Securities, a money-management firm in Rochester, Kodak's hometown.

"If they make a go of it, it could be very successful. If they don't, they're not going to have a second chance for a second act of this magnitude because the capital will not be as easy to come by. I don't think it has to work in '07 but it needs to show concrete results in '08."