Kodak’s Cameras Exit to Mean 400 Consumer Division Layoffs

Kodak’s announcement that it’s phasing out its capture device business -- including digital cameras, flip-style camcorders and digital picture frames -- will result in “significant impact among the 400 worldwide employees” of Kodak’s consumer business, company spokesman Christopher Veronda said Thursday. The company is exiting the digital device businesses during the first half of the year and is “actively seeking brand licensees” for those categories, Veronda said. The company has had “strong interest among several parties,” he said.

Regarding how long Kodak will continue to support product warranties and provide technical support for the cameras and frames, Veronda would only say, “for an extended period.” Kodak is “working to provide product for a period of time during the transition,” Veronda said, “and by providing continuing support for their customers."

Company layoffs aren’t restricted to the consumer business. The company announced Monday it would cut 16 percent of the workforce at its commercial digital printing systems unit in Dayton, Ohio, “to improve the profitability of that commercial inkjet printing business,” Veronda said.

In a prepared statement, Pradeep Jotwani, president of Kodak’s consumer business, said, “For some time, Kodak’s strategy has been to improve margins in the capture device business by narrowing our participation in terms of product portfolio, geographies and retail outlets.” Thursday’s announcement “is the logical extension of that process,” given industry trends, he said. Kodak expects to save more than $100 million by abandoning the camera and frame markets and to incur a charge of about $30 million, it said.

Last February, Kodak executives said at a conference in New York (CED Feb 4/11 p1) that digital cameras were the consumer segment’s “core” and that the company was “very serious” about “profoundly transforming” its digital camera business. Officials said the company would expand in pocket video camcorders, where it had a 17 percent share of the U.S. market in 2010, second to Cisco’s Flip at 30 percent. Kodak forecasted a 14 percent decline in digital camera and camcorder sales through 2013 to $1.2 billion, which it said, would be offset by a 30 percent gain in inkjet printers, retail kiosks, and dry labs.

Kodak has a “strong position” in the personal imaging market, with more than 100,000 retail kiosks and order stations for dry labs worldwide, the company said, and it plans to continue that business. Roughly 30,000 dry lab units are connected to “the most popular photo-sharing sites,” it said. Kodak will continue its iconic film and photographic paper business and consumer inkjet business, it said, along with Kodak camera accessories and batteries, which it said are “universally compatible with all camera brands.” The company also plans to expand into accessories including charging units for smartphones. Kodak filed for Chapter 11 bankruptcy Jan. 19.