Polaroid sacks one in four

Polaroid's SpiceCam: Yesterday's news

The film and camera maker Polaroid has announced plans to sack a quarter of its workforce.

The company is moving beyond its instant photography cameras

The 2,000 job cuts come as the company is working hard to transform itself into a digital imaging company.

"This is an extremely difficult decision, but an absolutely necessary one if Polaroid is to compete in the digital future," said chairman and chief executive Gary DiCamillo.

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

Debt problems

Polaroid already cut 950 jobs in February.

And last year, it sold several real estate assets, including its headquarters building in Cambridge, Massachusetts.

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.

Gary DiCamillo
Polaroid

These were efforts to slash debts totalling $860m.

The latest job cuts should save the company between $175m and $200m by the end of 2003.

About half the 2,000 job cuts will come in the USA.

UK jobs

In the UK, about 900 people work for its sales and marketing office in Hertfordshire and it its factory near Glasgow.

As of 1700 GMT, it was not known how the UK workers would be affected by the cutbacks.

"As this becomes clear, there will be the appropriate communication process with the workforce," the UK divisions said in a statement.

Polaroid's other non-US locations are Mexico, the Netherlands and China.

New technology

Polaroid's business was built on its instant photography technology, but one-hour film developing laboratories have made serious inroads into its market.

Polaroid shares cost less than a tenth of what they were five years ago

Last month, Polaroid launched its digital printing technology which it aims to develop together with other companies.

"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."

Share price

The company's share price shot up 11% in early trading in New York on Wednesday, but despite the rise it is still worth less than a tenth of its value five years ago.

Five years ago, Polaroid shares traded at $45.

The stock was trading below $4 on Wednesday.