Polaroid will cut approximately 2,000 jobs, 25 percent of its workforce, over the next 18 months
to stay competitive in nascent digital photography industry.
The move should save the Cambridge, Mass., company between $175 million and $200 million annually by the end of 2003. Polaroid will take charges of between
$150 million and $175 million over the next two years to pay for severance and other restructuring costs.
“This is an extremely difficult decision, but an absolutely necessary one if Polaroid is to compete in the digital future,” Polaroid chief Gary T. DiCamillo said in a
statement. “We must focus on our new Opal and Onyx instant digital printing technologies and manage our core instant business to generate cash and reduce debt.”
This is the company’s second layoff this year (950 jobs were cut in February). About 1,000 U.S. employees will be let go — most of them in Massachusetts. In addition to Cambridge, the company has operations in Bedford, New Bedford, Norwood, Norton, Waltham and Wayland.
The cuts come as Polaroid pins its hopes on new digital printing products it believes
have double-digit growth potential. Two years in the making, Opal and Onyx promise 35mm quality in a digital print, with the speed and simplicity of current print
options.
Polaroid envisions the two technologies finding homes in a variety of mobile printing tools — like mobile printer extensions for handheld devices and wireless phones
as well as retail kiosks, microlabs and home photo printers.
At the unveiling of Opal and Onyx two weeks ago in New York, Ian Shiers, a Polaroid executive vice president foreshadowed the restructuring.
“Our infrastructure clearly is too big, and the changes in our business require a significant reduction of our cost base in line with our conservative
revenue expectations for the next two to three years,” Shiers said.
Polaroid said bolstering its cash position will remain a priority in the near-term. The company has recently sold real estate and other assets in the Bay State to offset
sliding film sales. Despite this, the company expects operating loss to be similar to its first quarter results.
Investors reacted positively to the news. Shares of PRD perked up 0.12, or 3 percent, to 3.65 in heavy afternoon trading. In the last year, the issue has ranged from
3 to 19.9375.
