Fears for UK jobs as Kodak takes axe to 16,000

Kodak, the US photographic giant, yesterday stunned its workforce by announcing plans to cut another 6,600 jobs, on top of 10,000 already announced last month, in a $1.5bn (pounds 915m) restructuring drive.

The news from the group, which is the world's largest producer of photographic film with 40 per cent of the market, raised the prospect of further jobs losses from its 5,000 strong British workforce. A US spokesman said most countries would be hit. "It would be fair to say the impact of this will be felt everywhere," he said, though there were no details of the regional breakdown.

Last month Kodak said it would cut 10,000 jobs worldwide, to save $1bn, in the face of tough competition from Japanese rival Fuji. But yesterday the company revealed that the programme would see 16,600 job losses by 1999 out of a global workforce of 100,500.

Kodak employs about 1,000 people at its base in Hemel Hempstead in Hertfordshire and 2,000 in Harrow, north-west London, where the group makes colour photographic paper. A further 600 staff are based at Annesley in Nottinghamshire and Kirby on Merseyside. The group's British operations made sales of pounds 1.3bn last year and profits of pounds 131m.

Previous restructurings have already taken their toll on Kodak's UK operations, where staff numbers have fallen from 8,400 to 5,000 since 1992. Part of the drop came when Kodak sold its UK photocopier business, employing 1,200 staff, to Danka. The global reductions are on top of 2,500 job cuts still to come from a previous restructuring package announced late last year and another 800 revealed earlier this year. Kodak said it would take a $1.5bn restructuring charge to fund the latest programme, half of which would cover redundancy payments.

Kodak's problems intensified this summer when Fuji slashed the US price of colour camera film by 20-30 per cent for some retail chains, in a concerted attack on the domestic market of its arch rival. Meanwhile, the US group has been preoccupied with new forms of digital photographic technology.

Last night Kodak shares, which had almost halved this year on the setbacks, rose by 5 per cent on Wall Street as analysts predicted a quicker improvement in profitability.