Photography leader Eastman Kodak Co., or Kodak, has decided to stop selling consumer inkjet printers and focus instead on providing printing, packaging and related services to businesses.
Having filed for bankruptcy protection last January, Kodak is also seeking to prolong its exclusivity period for submitting a bankruptcy protection exit plan to February 28; this request will be reviewed in October.
Kodak will continue to sell ink supplies to existing printer customers, but will stop selling consumer printers over the next year at a cost of $90 million. The company also needs to significantly boost its production of large commercial printers, currently at only two dozen annually.
Kodak’s restructuring in coming months will cut 1,200 jobs, or 200 more jobs than previously projected, and will include the sale of Kodak’s consumer film, photo kiosk and commercial scanning businesses.
Kodak CEO Antonio Perez says he is confident these changes will “substantially advance the transformation of [its] business . . . and [it] will be well-positioned to emerge successfully in 2013.”
Perez is looking to pay back an over $600 million bankruptcy loan debt incurred as the rise of digital photography and increased competition from other companies caused Kodak to take a hit.
Several Turn-Around Efforts In 2012
Since filing for bankruptcy protection, Kodak has already made several changes, including cutting costs, selling businesses and terminating jobs, to secure the funding needed to move beyond court protection.
Among its successful sales, Kodak sold its online photo service business, Kodak Gallery, to Shutterfly Inc. this past May for nearly $24 million.
In February of this year Kodak said it would stop producing pocket video cameras, digital picture frames and digital cameras, among other products. It also announced intentions to sell its document imaging (scanners and related products and services) and personalized imaging (still-camera products and photo paper lines).
Further, after failed attempts to auction off its collection of imaging patents, Kodak is considering offers from buyers.
Finally, with global job cuts already numbering 2,700 this year, the 23% reduction in Kodak personnel over the next several months is expected to save the company $340 million a year and leave the total number of employees at over 13,000.
At its peak in 1988, Kodak, a pioneer in the photography industry, had an extensive workforce of 150,000; with the anticipated structural changes, the once-dominant Kodak will attempt to remain relevant on a much smaller scale.
Key Statistics – World Printer Market
- With a CAGR of over 5.5% between 2011 and 2016, the market for large-format printers worldwide is predicted to reach between $12 billion and $13 billion by 2016 (source: Markets and Markets).
- From 2011-2015, the market for printers in India should increase at a CAGR of 6%; the heightened demand for all-in-one printers is one of the major reasons for this growth (source: TechNavio).
- Between 2011 and 2015, the market for printers in the EMEA region should expand at a nearly 3% CAGR rate (source: TechNavio).