Friday, August 22, 2003

Kodak tries to keep up

Former H-P execs to focus on digital

The Associated Press

ROCHESTER, N.Y. - Grappling with the rapid rise of digital photography, Eastman Kodak Co. unveiled yet another reorganization Thursday aimed at cutting costs and accelerating growth in both consumer and commercial imaging.

Kodak hired Hewlett-Packard Co. veteran James Langley to run commercial printing operations, a new business that reflects its struggle to find new markets to compensate for the slump in sales of traditional, chemical-based film.

Langley, 53, spent 30 years in printing and publishing at Hewlett-Packard, rising to vice president of the computer giant's commercial printing division.

"Digitally driven commercial printing is a large and growing market and is a core part of our long-term vision to drive revenue and earnings growth," said Antonio Perez, who was hired from Hewlett-Packard in April to fill Kodak's No. 2 spot as president and chief operating officer.

Kodak expects Perez's background in digital printing will strengthen its ambitions in the fast-evolving digital arena.

Bernard Masson, president of the Kodak Display Group, will head a new division called Digital and Film Imaging Systems that oversees digital and applied imaging, entertainment imaging and consumer and professional imaging.

The consumer and professional photography businesses, which account for about 60 percent of Kodak's annual sales of $12.8 billion, were consolidated last month in an effort to pool resources.

The switch by consumers to digital photography is coming on faster than expected, cutting deeply into the film, paper and photofinishing businesses that anchor Kodak's profits and image. By the end of the year, industry analysts expect digital cameras to begin outselling film cameras for the first time in the United States.

Kodak is slashing 4,500 to 6,000 jobs this year - shrinking its global payroll to around 62,000 from a peak of 136,500 in 1983. Kodak largely blames the three-year slump in film sales on a sluggish economy and the rise of filmless digital picture-taking.

About half the cuts, mainly targeting the traditional photography divisions, will be made in Rochester, where Kodak is based and employs about 22,000 people.

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