Months After Eastman Kodak’s Bankruptcy – More Layoffs
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UPDATED: Sep 10, 2012
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Back in January, 2012, photography giant Eastman Kodak filed a voluntary Chapter 11 bankruptcy. Now, eight months later, the company is undergoing more layoffs and is once again restructuring its finances.
Over the past several years, Kodak has been engaged in a mess of legal intellectual property lawsuits, suing several well-known companies for patent infringement. With a decline in demand for consumer film, more emphasis on digital photography (dominated by other more digital-centric companies), and an overall downtrodden economy, it is through these lawsuits that the company has stayed in business, reporting making $3 billion from 2003 to 2010.Kodak claimed companies such as Apple, HTC, Samsung, and others, were infringing upon patented processes involving photo use on electronic and mobile cameras. The accused companies disputed the claims and Kodak lost in court against both Apple and HTC.
The litigations, along with failed attempts to sell patents to other electronic companies, pushed Kodak into their January bankruptcy. But did the filing do what the company intended, and are they better off now? According to recent reports of more layoffs, it seems not.
The bankruptcy was part of a plan to downsize and focus on creating and manufacturing printers as opposed to outdated photography technologies. Unfortunately, the previous restructuring has not been as fruitful as the company intended and more jobs are now on the chopping block.
Throughout the past 10 years, Kodak’s workforce has slowly dwindled. From nearly 64,000 in 2003 to 17,000 earlier this year, and now with a reduction of around 2,700, the company will employ a mere 13,400 people by year’s end.
The company also named excessive burden of retired employee benefits as a pitfall and as part of their bankruptcy, they hoped to reduce these costs. But in July, a bankruptcy judge gave a group of Kodak retirees “committee” status and extended to them a say in the reorganization plan, much like creditors have in typical bankruptcies. Ultimately, the company’s hopes of reducing the amount paid out to retirees were diminished as benefits were safeguarded.
Bankruptcy may have been the only option for Eastman Kodak to continue its legacy, but with a failed restructuring plan, along with a perhaps misguided dependence on patent-based income, the road ahead looks bleak for the company that once dominated the photography industry.