I'm by no means a class warrior, but riddle me this: Just whose fault is it that a company and its employees are sufferering because of that company's bad business decisions?
Posted on 01/22/2004 5:08:49 AM PST by 2banana
MASSIVE LAYOFFS AT KODAK
Number may reach 15,000 worldwide; local job losses uncertain
By Ben Rand Staff writer
PAULINA REID and KEVIN M. SMITH Eastman Kodak Co. said today that it will eliminate 12,000 to 15,000 jobs worldwide over the next three years because of accelerating declines in film sales and a need to be more aggressive in digital imaging. When the dust settles, the cuts likely will trigger an epic change in Rochester’s economic landscape as its share of the work force, historically the largest among local employers, continues to decline. [Day in Photos]
(January 22, 2004) — NEW YORK — Eastman Kodak Co. will eliminate 12,000 to 15,000 jobs worldwide over the next three years because of accelerating declines in film sales and a need to be more aggressive in digital imaging.
When the dust settles, the cuts could bring an epic change in Rochester’s economic landscape.
Kodak said it could not project how many of the cuts would take place in Rochester — but history and logic suggest it will be a high number since the region is home to Kodak’s largest manufacturing base. As a result, Kodak could surrender its title as the region’s largest employer — a designation the company has held longer than almost anyone can remember.
Job cuts at Kodak have a ripple effect on the area’s economy, cutting into everything from retail sales to capital investments to property taxes in the region.
“We understand this is going to be painful for everyone to go through, but if we don’t change, there is a bigger price to pay,” Chairman and Chief Executive Officer Daniel A. Carp said in an interview. Kodak released the news at 3 a.m. today.
In addition to cutting 20 percent to 25 percent of its global work force, Kodak will also drastically reduce its physical presence here and around the world.
The company expects to close or sell about a third of the square footage it now occupies for offices, manufacturing, research and other functions.
The new cutbacks are part of an increasingly historic shift in priorities at the company, known around the world for products that convert special moments into memories.
The cuts were to be announced this morning in New York City, where the company is discussing fourth-quarter and year-end financial results with investors and analysts.
Calculating in previously announced cuts, and assuming that any acquisitions Kodak makes would not dramatically increase the Rochester work force, local employment could fall to between 13,000 and 15,000 workers.
Kodak said the cuts were necessary to stay ahead of the biggest threat to the company in its history.
The growing popularity of digital cameras has triggered a permanent decline in sales of photographic film, Kodak’s marquee product.
“These plans are the consequence of market realities, and they will help us to fund a future for Kodak of sustainable, profitable growth,” said President and Chief Operating Officer Antonio Perez in a statement.
“They are absolutely required for Kodak to succeed in traditional markets as well as the digital markets to which our businesses are rapidly expanding.”
Kodak will use a combination of layoffs and early retirements worldwide to counter what is expected to be a precipitous drop in operating profit delivered from film.
An estimated 2,500 to 3,500 layoffs will take place worldwide in 2004.
The entire package of reductions will target manufacturing, corporate administration and portions of the company’s traditional photographic business, such as wholesale photofinishing.
The new reductions are on top of an already sizable package of layoffs announced last year.
The cuts should reduce costs $800 million to $1 billion a year by 2007, Kodak said.
The company will use that money to finance even more aggressive investments in such new opportunities as consumer digital photography, home inkjet printing, commercial printing, consumer electronics, radiology and more.
The new digital opportunities, Kodak says, will help build a company that is more successful and financially sound because it is less tied to the fortunes of a single product. Carp, in a statement, described the moment as “the dawning of a new, more competitive Kodak.”
Carp acknowledged the good news-bad news nature of the announcement for the Rochester work force. And on Wednesday night, he reaffirmed Kodak’s commitment to the region.
“We plan to be there a long time,” he said, “but Kodak will look different than it does today.”
Kodak’s accelerated strategy for digital imaging was initially announced in September.
Since then, the program has drawn fire from former employees, analysts and institutional investors.
Critics say the overall plan is risky and say it could lead Kodak into financial turmoil — perhaps even forcing the company to sell itself off in pieces.
Kodak Park is the company’s largest manufacturing site and is heavily vested in the production of film and traditional photographic products. It employs about 15,000 people and stretches across several miles of Rochester and Greece.
At the end of 2002, Kodak said it employed about 21,000 people in the Rochester area. In July, 2003, Kodak announced a round of 2,000 to 3,000 layoffs.
If just a third of the new cuts are local, Kodak’s Rochester work force would fall to between 13,000 and 15,000 people by 2007.
BRAND@DemocratandChronicle.com
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Officials' opinion The Democrat and Chronicle was unable to reach public officials for comment prior to press time, but here are comments made in previous reports: “While we may not be able to do anything to help Kodak as it continues to downsize and lay off people and do what it has to do to survive, we can create the business climate in this community so that when people do lose a job at Kodak, there is a better opportunity for them to be absorbed into a work force here.”
Maggie Brooks, now Monroe County executive Oct. 12
“At a time when Kodak is asking its workers to make sacrifices and this community to make sacrifices, it doesn't seem inconsistent to ask something of shareholders. It seems they are at least being even-handed at a difficult time. They could keep the dividend, but how would a worker feel if investors still were to make money when Kodak wasn't keeping resources.”
Assemblyman Joseph Morelle, D-Irondequoit Sept. 26, reacting to news of change in Kodak's business plan
Yes, digital imaging has even affected radiology. I work at a fairly large medical center, and all x-rays, MRI's, CT scans, etc. that are done "on campus" are done digitally. There are many advantages: no chemicals, easier to store,and most importantly, the image can be viewed anywhere on the computer network, which encompasses over 20 counties in Pennsylvania. So if a primary care doctor sends their patient to see an on-campus specialist, and a CT scan is done, that primary doctor 100 miles away can pull it up on his or her computer right after it is done. You can also "zoom in" to a specific spot as well as do measurements. The only disadvantage is that it is limited to the resolution of the monitor. The radiologists have high resolution monitors, though, so it isn't that much of an issue. Amazing...
I'm by no means a class warrior, but riddle me this: Just whose fault is it that a company and its employees are sufferering because of that company's bad business decisions?
I guess the writing's on the wall, now - they may not know film, period, at this rate ;)
Surely you jest. Just wait to hear what Pelosi, Dashchle, Kennedy and other Rats have to say. This is all Bush's fault because less film is sold and more people are going digital.
Kodak Employee Fired For Calling "Coming Out Day" "Offensive and Disgusting""
Kodak fires man over 'gay' stance
I'm still here and work for Kodak. It's 20 degrees, we've already had 100" of snow with another 12" due today - and now more layoffs. It doesn't get better than this (and it's only January).
I left Rochester in 1981 after having worked at both Kodak and Xerox. Rochester was already dying then. General Dynamics had already closed up shop. Xerox was laying off 4,000. And, as the chart shows, Kodak had already lost several thousand jobs. As I recall, in 1971, Kodak Park alone had 50,000 employees.
Regards, Eric
Really???
National Geographic only did their first ALL DIGITAL shoot for the December 2003 editon...the History of Flight.
Had to...military censors, wartime restrictions, reluctance to have the Military develop and control the film, etc., etc., etc.
Film will remain KING for serious Photography...
But remember, KODAK is a Specialty Chemical Company that just uses Photography to peddle Chemicals...not enough volume???
Let Fuji take the business!!
Yep. Too much government will kill the business environment, one way or the other (Left/Right).
That's why I'm for the separation of business and State.
The executives
made the bad decisions. Now,
the grunts pay the price...
"If I'm going to be broke, I'm going to be broke where it's warm"
Yup.
Whether or not Greenspan has been successful, [and I think he is], this is the LAST Recovery that can be pulled out like a rabbit from a hat!!!
The only areas of the country barely surviving are the Beltway, New York, Boston, and the Sunbelt, bouyed as it is with American population shifts.
By 2008, expect BIG changes, though NOT necessarily to the Democrats [wrong side of the Culture Wars].
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