Posted at: 09/28/2012 9:25 AM
Updated at: 09/28/2012 5:46 PM
By: Berkeley Brean
Kodak announced Friday in a news release that it will reduce its workforce by an additional 200 by the end of the year. The number of layoffs in 2012 will now total 1,200 or 23-percent of Kodak’s workforce. According to the company, this reduction will result in a savings of more than $340-million per year and a workforce of approximately 13,100 employees.
The experts think Kodak did the smart thing getting rid of its ink jet printer business. But they wonder if it's too little too late.
Kodak says it's not just cutting the ink jet printer business but 200 jobs as well. We don't know if all of those jobs are in Rochester but the bulk of the ink jet printer business is.
We hear all kinds of tough news about Kodak these days. So we wanted to get an expert's opinion.
The money men at Brighton Securities study this stuff and they know what they're talking about when it comes to Kodak.
The original bankruptcy protection and re-organization plan for Kodak promised to do the following things.
- shed unprofitable businesses
- reduce costs and eliminate jobs
- get cost structure under control
- focus son profitable growth oriented businesses.
The experts at Brighton Securities say Kodak consider the ink jet printer business to be one of those profitable businesses. But when the accountants at brighton securities looked at it, they say a business that barely made a profit.
"This is a difficult business to make money in, there are huge competitors The margins are tight. It's a race to the bottom for costs," Michael Francis, V.P. Of Brighton Securities said. "Their angle was we're going to reduce the cost as far as the ink goes. Another commodity business. It just didn't work. Today the decision was made to let it go."
Francis said moves like this feel like another step in Kodak's demise. But he also said if Kodak keeps cutting money-losing segments and focuses on what makes them money, they can still come out in the end. He says it's not a lost cause.
Kodak calls it their "emergence."
Kodak CEO Antonio Perez said, “The actions we are taking are significant steps toward our successful emergence. We are committed to take the remaining steps required for our emergence in 2013 as a profitable, sustainable company.”
The company says it will highlight its restructuring accomplishments to date in a motion it will submit to the Bankruptcy Court to extend until February 28, 2013 its right to file a plan of reorganization. According to Kodak, this extension will help the company as it continues towards successful emergence in the first half of 2013.
Kodak says it will also wind down sales of consumer inkjet printers which should significantly improve cash flow in the first half of 2013.
Click here to read the full release from Kodak