Kodak to layoff another 10,000. Declining film sales cited.

Discussion in 'Kodak' started by Jeremy, Jul 20, 2005.

  1. Jeremy

    Jeremy Guest

    From today's New York Times:

    "July 20, 2005
    Kodak, Posting Another Loss, to Lay Off 10,000 Workers

    Eastman Kodak said today it would lay off up to 10,000 more people
    because its film business was declining much faster than the company had

    The latest cuts will be in addition to the 15,000 positions it announced
    plans to eliminate in 2004, and come as the company, which is based in
    Rochester, posted its third straight quarterly loss today.

    About 7,000 of the cuts will come in the manufacturing operations. The
    company estimates it will save about $800 million a year once the jobs
    are eliminated by the middle of 2007, but said it would incur $470
    million in restructuring costs.

    "Our disappointing start in the first half of the year makes it clear
    that I need to make some changes, and make them now," Antonio M. Perez,
    Kodak's chief executive and president, said in a statement. "Sales of
    our consumer traditional products and services are declining faster than
    expected. While we are not in a position to control the rate at which
    traditional markets decline, there is a lot I can do about the cost
    structure of the traditional portfolio."

    Kodak lost $146 million (51 cents a share) in the second quarter that
    ended June 30 on revenue of $3.7 billion. That compares to a profit of
    $136 million (46 cents) on revenue of $3.5 billion for the same period
    last year.

    Though it had been clear that Kodak was undergoing a difficult
    transition from film to digital, investors and analysts appeared
    unprepared for today's news. Analysts had projected the company would
    have a 80.5 cent profit for the second quarter, not a loss.

    Kodak had losses of $142 million and $59 million in the first quarter
    and fourth quarter of 2004 respectively.

    Digital cameras have had one of the fastest growth rates of any new
    technology, and many consumers are no longer using traditional cameras
    or film, for which Kodak was the major domestic supplier. Also, because
    people are not using as much film, demand for photo processing and paper
    has also dropped off dramatically.

    Like other companies, Kodak has enjoyed brisk growth in digital product
    sales, but it hasn't been fast enough to make up for the rapidly
    shrinking film business that the company pioneered. Together the
    company's sales of digital and film products fell 12 percent to $2.2
    billion in the second quarter. (Much of the remainder of Kodak's revenue
    is made up of graphics and health products.)

    As of the end of last year, the company employed 54,800 people. Kodak
    said it had already eliminated 13,475 of the initial 15,000 jobs to be cut."

    Jeremy, Jul 20, 2005
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  2. Jeremy

    Gordon Moat Guest

    News yesterday had HP cutting 14500 jobs. Interesting that there was a
    recent post about someone seeing Made in China on Kodak film boxes, so I
    guess the transition to using Lucky Film production is going "well" for
    Kodak. I just placed an order with B&H for film, and I wonder if that
    professional film will also be labelled "Made in China".
    Gordon Moat, Jul 20, 2005
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  3. Jeremy

    Joseph Kewfi Guest

    I just placed an order with B&H for film, and I wonder if that
    Probably not just yet, give it another 12 months I'd bet.
    Joseph Kewfi, Jul 20, 2005
  4. Jeremy

    Gordon Moat Guest

    Check out this PDF from Kodak, the latest SEC report:


    According to the most recent filing with the SEC, the largest revenues are from the Graphic
    Communications group, followed by Medical Imaging. Film and Digital consumer products are under
    the same division, though their combined revenues are less than even the Medical Imaging group.
    In other words, Kodak is now less than 1/3 a consumer imaging company. Since film revenues,
    photofinishing and direct digital imaging are all grouped together in revenue reporting, and
    numbers supplied by Kodak indicate lower volumes for film and photofinishing, it would seem that
    film is a very small part of Kodak.
    Gordon Moat, Jul 20, 2005
  5. Whatever credibility Kodak had with pros and serious amateurs is
    rapidly eroding with the disappearance of B&W paper, the loss of 10,00
    jobs, the appointment of a man with a digital background as president,
    and the absolute unmitigated gall of him to say: "While we are not in a
    position to control the rate at which traditional markets decline,
    there is a lot I can do about
    the cost structure of the traditional portfolio."

    This is complete idiocy. Kodak can indeed (through INTELLIGENT
    marketing) "control the rate at which traditional markets decline". How
    can the PRESIDENT of a major corporation say such imebcilic things? If
    HE doesn't know how to do it, let ME come there and I'll SHOW him how
    to do it!

    Of course, INTELLIGENT marketing cannot be used in the same sentence
    with the name "Kodak" anymore....

    What is wrong with these people?
    uraniumcommittee, Jul 20, 2005
  6. Jeremy

    Jeremy Guest

    I was the one that bought the Kodak Gold 200 film, warehouse club pack
    of 8, that was marked, "Made in China for Eastman Kodak." The stuff has
    been sold at the lower price for about a month, so I presume that is
    about how long the Chinese product has been distributed here.

    The press release mentioned something about this latest round of layoffs
    representing the completion of Kodak's transformation to a digital
    company, or words to that effect. I take it to mean that they won't be
    manufacturing much more amateur films in Rochester for long. It will
    take about a year to complete the layoff process, and I'll just bet that
    we'll soon be seeing virtually every Kodak emulsion coming to us from
    China before long. We knew this was going to happen.

    This will probably be the end for the Kodachrome lineup. If Kodak cuts
    US manufacturing, they will probably explain it as not being worth the
    cost of moving production offshore, in view of the product's relatively
    low revenues. Much as I hate to see Kodachrome's demise, the
    handwriting on the wall seems clear.

    With regard to the Chinese film, the bright yellow box looks just like
    it always did. I can't determine whether it was a US-made box, or
    whether it was printed in China (it didn't say). Suspect it is Chinese,
    because it would not make economic sense to package the film in the US.
    My point is that the stuff looks just like the familiar product, and
    probably will perform as well as the US-made emulsions did. I don't
    think that most consumers will notice that anything is different. I
    just happen to be sensitive to everything being made in China, and I
    noticed it on the film box.

    Last time I bought lens paper, it said made by Tiffen under license, and
    the package looked the same as always. I believe their lens cleaning
    fluid is also made under license by a third party. I wouldn't be
    surprised if Kodak eventually had all that familiar stuff made elsewhere
    and sold with their name on the package.

    It's sad, but I prefer to have the product remain available, even if it
    IS made by someone else, rather than see Kodak withdraw from the market
    Jeremy, Jul 20, 2005
  7. I couldn't agree more. From where I sit, Kodak has totally lost the plot.
    Steve Marshall, Jul 21, 2005
  8. Jeremy

    Jerry L Guest

    It will "create" 5,000 jobs in China _down the road. Kodak has no
    plans to reduce film production for the market in China (that is why
    some film production has moved to China...save shipping costs.)

    If you work for Kodak, ouch!
    = = =
    Jerry L, Jul 21, 2005
  9. Jeremy

    Gordon Moat Guest

    I thought it was you, but I didn't want to try to dig through the old posts.
    I will definitely post about what I find on the boxes in my B&H order.
    What bothers me is that the public statements don't indicate what is really
    going on at Kodak. They spent lots of money recently getting KPG, Creo, and
    completing the acquisition of NexPress.
    Take a look at that link to the PDF I posted, and their is an item of $19
    million for something called Lucky Film. It is also a recurring expense item.
    This is their twenty year commitment to funding Lucky Film, which started in
    2003. Since that, they have been able to lay off more US workers.
    Well, it amazes me that it has lasted this long.
    I last saw Kodachrome available in Target last year. The last ad I saw was in
    PDN nearly three years ago. Honestly, I will not be missing it.
    Printing costs are not that much different in different parts of the world,
    but the labour cost is very different. On a shipping basis, it might make
    more sense to do the printing there too. Then a ready-to-sell box arrives
    If the quality went down, at whatever point they move professional films to
    China, then it would bother me. If there is no difference in quality, I have
    no trouble continuing to purchase some Kodak films.
    Sure, they have the established brand. I don't think having a box with Lucky
    Film on it would generate much sales in the US.
    I bet Fuji would like it if Kodak entirely quit film production. Of course,
    Kodak would like it if Fuji entirely quit. Both are probably happy about
    troubles at AGFA Photo.

    I like several of the currently available emulsions. They give me a good
    range to choose various palettes of colour response. With B/W films, I am
    more AGFA and Ilford biased, though I do like some Kodak choices.

    The revenues are still in the hundreds of millions, definitely enough for
    some companies somewhere to remain interested. Even if the revenues dropped
    to the tens of millions, the smaller companies would stay involved. Profits
    will attract businesses, though smaller profits will attract smaller
    Gordon Moat, Jul 21, 2005
  10. Jeremy

    casioculture Guest

    Not just Kodak but many American and British corporations too.

    There's a glut of unimaginative managerial horde whose imagination goes
    no further than laying off employees or working them longer for less
    casioculture, Jul 21, 2005
  11. Addle-brained, artery-clogged dolts.....

    uraniumcommittee, Jul 21, 2005
  12. unfortunately us consumers are more fussed about the product, than about
    what the company is doing to their staff.
    sensible, if you ask me.
    well I think that's true - what can you do?
    there's an odd misconception that markets are controlled by marketing. this
    isn't true - marketing acts as a catalyst - by increasing awareness of the
    Market forces, I'm afraid.
    Duncan J Murray, Jul 21, 2005
  13. Not at all. He has no knowledge of the film business.
    A lot. I'd point out the advantage sof film in advertisements.
    You certainly CAN affect the market by advertising. How did people
    learn about digital?
    uraniumcommittee, Jul 21, 2005
  14. sensible, if you ask me.
    o.k., that's not great, but if Kodak are going to survive at all they are
    going to need someone with good head for digital.
    Sure you can, but I don't think you can control the market. marketing was
    required for digital to increase it's awareness - but the awareness of film
    is, unfortunately, all too well known.

    A large proportion of revenue for Kodak came from people who used P&S
    cameras for their holiday snaps - a huge market. Doing just a quick survey
    of your non-photography-enthusiast friends, they'll be saying digital is
    cheaper, quicker, more convenient and better quality than film. The
    advantages of film for these people are lost on them - 30"x20" enlargements
    anyone? Slide film? - unlikely. And all the advantages of digital over
    colour neg are true - the quality is better at small sizes (due to places
    like Jessop's scanning and printing colour negs at awful quality), they are
    certainly more convenient, cheaper - on balance mostly for p+s, quicker

    For enthusiasts and professionals, most are sticking with film because they
    want uncompromising quality. Look at all the really top landscape, fashion
    and journalistic photographers, and I think most are still using film (be it
    35mm or MF), for various reasons. They'll be using film for a long time,
    but the revenue from film for companies like Kodak and Fuji for their film
    must be cut by something like 70-80% with the transition. What can they do
    about this?

    I don't see any of my colleagues switching back to point and shoot film
    cameras for any reason or marketing hype.

    Duncan J Murray, Jul 22, 2005
  15. Jeremy

    Jeremy Guest

    That *may* be precisely the point--Kodak appears to have unhitched their
    wagon from film's star.
    Jeremy, Jul 22, 2005
  16. Jeremy

    HvdV Guest

    Duncan J Murray wrote:

    IMO switching to selling digital camera's is not going to help much if the
    buyers do not need to come back to the (former) film maker for consumables.
    It would be ideal for them if a digital camera would need something like
    expensive ink cartridges and special photo paper. But since 99% (or more?) of
    all digital photos are never printed, at best just stored and forgotten on
    disks, I don't see how they could earn the same amount of money they used to
    from the consumer imaging market.

    just my 2 cts, Hans
    HvdV, Jul 22, 2005
  17. Jeremy

    Gordon Moat Guest

    Okay, so my B&H order arrived. Each of the boxes of E100VS and E200 state:

    "Made in USA
    Finished in Mexico for
    Rochester, NY 14650"

    About the only other thing is that the E100VS has French and English, while
    the E200 has French, English and Spanish. Also, the little black ink
    imprinting film guide that use to be inside the box is gone . . . probably
    saved a small amount of money per box. So it seems that printing and
    packaging might be done in Mexico.
    Gordon Moat, Jul 23, 2005
  18. Jeremy

    Justin Thyme Guest

    I don't hear much about Fujifilm laying off workers from their film
    division. Fujifilm have also announced new films in the past few months.
    Perhaps Kodak's film sales declining faster than they expected is more about
    their quality rather than the general decline of film. They've axed the 2
    films they had which were siginificantly better than anything the opposition
    had (Kodachrome & Techpan), and now what they have left is second rate. The
    only people I personally know of still using Kodak are those who still view
    Kodak as being synonomous with film and won't use anything else. Practically
    every advanced amateur and pro that I meet and talk with is using Ilford or
    Fuji B&W or Fuji colour films. Even at the local Kodak Pro shop, the only
    Kodak film they stock is the consumer range - all of their B&W & Pro films
    are Fuji. I don't know of anyone who likes Kodak's photo papers and Kodak's
    processing either. About 10-15 years ago, Kodak's films were the best on the
    market - it seems to me that they have since rested on their laurels, been
    overtaken and now are suffering the consequences of having a 2nd rate
    product on the market.
    While I am no fan of Kodak's current offerings, I would be sad to see them
    go, and I am sad that it seems they have stopped R&D a long time ago. If
    Kodak vs Fuji became a real competition where each constantly tried to outdo
    each other, I'm sure film technologies would continue to improve, and film
    would sit alongside digital, rather than the way it is heading where film is
    soon to become a niche product. I for one still believe there is room for
    improvement in film and processing - it had constantly improved dramatically
    since the late 1800's, right up until digital started becoming popular and
    R&D dollars got turned into digital instead of film. I know there is still
    room to improve - Velvia 100 for example is quite a match for Velvia 50 - it
    is proof that they still can make improvements to emulsions to give better
    Justin Thyme, Jul 29, 2005
  19. Kodak's films are not that bad, it's just that the Marketing Department
    seems to have no clue on how to sell film, and keeps changing the names
    of the films and purposes for which the films are to be used.

    Kodak's Marketing Department is without doubt the most fucked-up bunch
    of morons I have ever encountered.

    If you read older Kodak publications from the 1940's and 1950's, you
    see from what Olympic heights they have fallen. They had dozens of
    pamphlets and guides, all aimed at specific users, and chock-full of
    accurate and useful information. I'm writing my own book based largely
    on these old pamphlets.

    One problem is that Kodak's B&W materials have become a bad joke,
    especially the T-Max films and the papers, which are now deceased, with
    good reason. Ilford captured the student market a long time a go with
    student packs that included two rolls of HP5 free. Once the students
    became accustomed to Ilford filma nd paper, they would go on to use it
    out of habit. Kodak belatedly tried to match this packaging, but they
    looked so inept...

    I am not aware that Japanese companies publicize their layoffs. Anybody
    uraniumcommittee, Jul 29, 2005
  20. Jeremy

    Justin Thyme Guest

    Agree - The packaging they use here in Australia doesn't even have the ISO
    clearly marked on it - it is in fine print above the barcode. This is film
    marketing for dummies, which is fine if it is only dummies you want to sell
    to. Anyone with even a moderate clue will prefer to see the film speed.
    Would it be that hard for them to say "Bright Sun ISO 100" instead of just
    "Bright Sun".
    Again agree. I loved the old Kodak publications. Like I said, there was a
    time when Kodak was synonamous with photographs - not only did they produce
    the materials, they provided the info so you could make the most of them. I
    used to love Kodak and their products, but they've been well and truly
    overtaken. Focussing purely on digital hasn't helped their cause. But then,
    they are only doing that half-arsed too - while they are focussing on
    "Easyshare", they seem to have forgotten how to actually make a decent
    camera - my old 2MP DC3400 takes better photos than their new 5MP models.
    Again they seem to be targetting the exact same demographic that they are
    targetting with their films - "photos for dummies". The only problem with
    that is - people will cut their teeth on a Kodak camera, but when they want
    something decent it won't be Kodak they buy. This marketing strategy of
    selling entry level consumer cameras would have worked in film days, because
    even when the customer upgraded to a Leica or whatever, they still used
    Kodak film and processing. With digital, you have to make sure you either
    keep selling the cameras, or are selling photo-finishing. And Kodak have
    stuffed up there too. Fuji, Agfa and Konica have beaten them with digital
    labs that produce real photos, while Kodak was buggering around with
    dye-sub. Kodak finally have Noritsu labs rolling out, but it's too little
    too late.
    Personally, I think they should have kept advertising film, and while having
    a foot in digital's door is fine, if they pushed film alongside, as Fuji is
    doing, they would be better off. Film is where they make money every time a
    customer presses the shutter button. With digital they only make money when
    prints are made or if the customer buys a new camera. Fuji seem to be saying
    "we do digital and film, and don't care which one you use, we'll support you
    either way", while Kodak seems to be saying "We sell digital cameras because
    film is dead, but you have to also buy one of our printers and pay high
    prices for our paper and ink because our labs can still only print film, but
    film is dead, but our labs only do film, but... oh shit".
    Justin Thyme, Jul 29, 2005
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