Kodak to sack 10,000 employees: Worldwide workforce to be reduced by 8%

Click to follow
The Independent Online
EASTMAN KODAK, the troubled US photography giant, plans to make 10,000 employees redundant over the next two years as part of a plan to cut costs by some dollars 2bn ( pounds 1.4bn) over that period.

The job cuts, which equal about 8 per cent of the company's worldwide workforce, were announced yesterday by the chief executive, Kay Whitmore, who is being forced out of the job because of his failure to improve Kodak's profits. A successor is to be named by the end of the year.

'My commitment is to ensure that Kodak's new leadership benefits from the progress we are making,' Mr Whitmore said, refusing to comment on the search by Kodak directors for his replacement.

Speculation has focused on Richard Braddock, chief executive of Medco Containment and former president of Citicorp.

Details of the redundancies are 'not yet fully developed,' a Kodak spokesman said, and it is too early to say which divisions or countries will be affected.

After cutting 2,000 people in its imaging division earlier this year, Kodak now employs 132,600 people worldwide, about 6,000 of them in Britain.

Mr Whitmore said that the savings, together with limits on research and administrative expenses, should raise a total of dollars 2.8bn in cash flow by 1995. Last year's cash flow amounted to only dollars 150m, he said.

The money saved through the cost- cutting will be used to reduce Kodak's debt, improving its balance sheet so that it can regain its full A credit rating, which has fallen to A-minus as its performance has lagged.

Mr Whitmore said that the company continued to 'pursue opportunities to turn assets into cash.'

But the cuts announced yesterday fell well below Wall Street's expectations. Some analysts said they doubted the company's real commitment to capping expenses, suggesting Kodak could easily shed twice as many employees.

Analysts also challenged Mr Whitmore's claims about cash-flow improvements, arguing they expected the company to generate almost as much without serious cost-cutting.