Polaroid Cutting 2,000 Jobs

by JUSTIN POPE AP Business Writer

BOSTON (AP) -- Camera and film maker Polaroid, facing enormous debts as it tries to reposition itself as a digital imaging company, said Wednesday it would cut 2,000 jobs, or 25 percent of its global work force.

Its stock price leapt 11 percent in early trading, but was still less than a tenth of its value five years ago.

About half of the jobs cuts would come in the United States, said spokesman Skip Colcord. Most of the company's domestic work force is in Massachusetts.

Polaroid said the restructuring should save the Cambridge-based company between $175 million and $200 million annually by the end of 2003. The company will take restructuring charges against earnings totaling $150 million to $175 million in 2001 and 2002.

''This is an extremely difficult decision, but an absolutely necessary one if Polaroid is to compete in the digital future,'' said Gary T. DiCamillo, chairman and chief executive. ''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.''

The company had debt of $860 million as of May 16, according to its latest quarterly report.

''It's long overdue. They had to do it,'' said analyst Ulysses Yannas of Buckman Buckman & Reid.

He said the cuts would amount to a 10 percent cut in Polaroid's selling, general and administrative costs, which includes advertising and research. Yannas said those costs ''are way out of line with their competition,'' and added, ''This is where, essentially, they have to do heavy cutting.''

The company already cut 950 jobs in February as it announced a plan to reduce debt.

Polaroid's core business of instant photography has struggled as one-hour film developing laboratories have proliferated.

At an analysts conference last month, the company debuted new digital printing technology it said is part of a new business plan to collaborate with other companies to build kiosks, printers and related hardware.

But while trying to reshape its business, DiCamillo has struggled to pay down $950 million in debt since joining the company in 1995. In the last year, the company has sold several real estate assets, including its headquarters building in Cambridge and its Waltham office park.

The company's stock price was $45 per share five years ago. Polaroid shares rose 42 cents to $3.95 in early trading Wednesday morning on the New York Stock Exchange.

-- PHO (owennos@bigfoot.com), June 13, 2001