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September 26, 1997
Kodak Warns It Plans to Fire 200 Managers
Eastman Kodak Co. indicated it will fire more than 200
senior and middle managers, scale back research and development and trim
10% of its administrative staff in its first majjor cutbacks since George
Fisher became chief executive in 1993. The move appears to mark the beginning
of a series of moves to streamline the troubled photography firm. The planned
cutbacks come as Kodak is grappling with weak earnings and intense competition.
Last week, the imaging giant warned investors that its operating earnings
for 1997 could fall as much as 25% below last year's figure of $4.50 a share.
The company blames currency woes for past of the problem, but also says
prices are falling across many of its major markets, from 2-ray film to
color photographic paper. Kodak is suffering from problems across the board
of its operations. Its cash-cow consumer photo film operation is under attack
from Fuji, which has gained several points in the U.S. market share. Kodak's
bold plunge into digital-imaging products, such as digital cameras and color
printers, isn't yet paying off. Analysts estimate digital-imaging losses
could reach $150 million this year. Kodak declined to discuss financial
effects ofthe proposed restructuring.
Excerpt from Wall Street Journal.