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Kodak Announces More Than 1,000 Layoffs

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Rochester: Kodak Announces More Than 1,000 Layoffs
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Kodak is required to file monthly reports to show the U.S. Bankruptcy Court how it's doing. Analysts we spoke to say the numbers show despite all its efforts, Kodak's moves may all be a too little too late even as the company told more than 1,000 employees they were being laid off Tuesday.

"The thing that stands out the most is that the rate of decline of their sales is accelerating precipitously," said Brighton Securities financial analyst Brennan Redmond.

Redmond said if Kodak's sales numbers continue the trend they're on, the company's quarterly sales year over year could be down 60 percent.

"What that means is their customers are leaving them in droves. They haven't been ramping down their organization fast enough to meet the decline in sales, so the losses continue to increase and the cash burn continues to increase," Redmond said.

Kodak's recently filed report shows the company's U.S operations ended August with $345.8 million in cash. That's down 21 percent from July.

Kodak also did not get the cash it was hoping for and needed from the sale of its patents.

The company has been ramping down by selling off businesses and laying off employees. Kodak said that it determined 3,900 positions would be cut this year. Most of those had already happened by the end of September. Many of the remaining 1,200 were told Tuesday.

Analysts say it just may not be enough.

"They had planned on having a big chunk of money to be able to do some restructuring, buy them time, and fund an emergence from bankruptcy. Without that patent sale, it looks increasingly likely that a Chapter 7 liquidation is in Kodak's future."

Redmond said to watch October 15th, when Citigroup could choose to make its financing money due. He says that move would force Kodak into Chapter 7. If it makes it past that, Redmond said it's more asset cuts and layoffs ahead.

Again, the numbers in Kodak's reports are for the U.S. The company says sales are growing worldwide. It still hopes to come out of bankruptcy in the first half of next year.

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