Kodak first detailed its intention to focus more sharply on digital products in September, and said earlier this month that it would no longer offer traditional film cameras in the United States, Canada and Western Europe. As the market for digital photography has grown, the company has seen its long-standing sources of revenue falter and is looking to burgeoning markets such as medical imaging systems and production printing to bolster sales.
Under the new restructuring plan, the company plans to layoff between 12,000 and 15,000 of its 70,000 employees worldwide. The staff reduction will largely affect workers in Kodak's film and camera operations, including manufacturing and administrative staff, according to a company statement. Kodak also plans to reduce the total square footage of its facilities by about a third, with some operations undergoing consolidation and others being shuttered completely.
The layoffs and facility closures will be initiated over a three-year period and will incur cash and noncash charges totalling between $1.3bn (£0.71bn) and $1.7bn (£0.93bn). Kodak said that some $700m to $900m of that total will be attributable to employee severance packages, with another $600m to $800m going toward the disposal of buildings and equipment.
Kodak executives called the downsizing a necessity of changes to the company's business model and pointed to a brighter future for the photography veteran when it has decreased its dependence on traditional film products.
"These plans are the consequence of market realities, and they will help us to fund a future for Kodak of sustainable, profitable growth," Antonio Perez, president of the company, said 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 shifting. To succeed, we must make our business model more competitive with what the markets and our customers demand."
