Kodak - Kodak CFO Leaves; More Jobs Cut

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Eastman Kodak Co. replaced its chief financial officer and moved to cut another 1,000 jobs in an effort to slow its consumption of cash and better position the company to emerge from bankruptcy court.

The moves follow a sharp increase in cash use in July and a stumbling patent auction that looks unlikely to raise as much money as the company had hoped. Those developments threaten to make it harder for Kodak to emerge from Chapter 11 in its new incarnation as a printer maker, forcing the company to consider new asset sales to raise funds.

Cash held by Kodak's U.S. operations fell by $72 million in July, the most recent figure available, compared with cash burn of $64 million in June and $43 million in May. Creditors responded by putting more pressure on the company to cut costs, according to creditors familiar with the matter. Many called for management changes, specifically for Chief Executive Antonio Perez and Chief Financial Officer Antoinette P. McCorvey to resign, the creditors said.

On Monday, Kodak said Ms. McCorvey would be leaving the company. Rebecca Roof of AlixPartners LLC, a restructuring advisory firm hired by Kodak, was named interim CFO.
A spokesman for Kodak declined to comment on calls for Mr. Perez to step down.
Under the reorganization laid out Monday, Kodak will remove some layers of its executive ranks. Co-President Philip J. Faraci will leave the company and won't be replaced. Mr. Faraci worked with Mr. Perez at Hewlett-Packard Co. HPQ +0.82% prior to joining Kodak and was largely viewed as the CEO's right-hand man.

Laura Quatela, Kodak's other president, will lead the personalized imaging unit. Dolores Kruchten, who was general manager for business solutions and services, will head the company's document imaging business. Both are expected to leave the company after those businesses are sold in the first half of 2013.

The latest round of layoffs adds to the 2,700 jobs cut so far this year, leaving about 13,400 workers at a company that once employed 145,000. Kodak said it expects to save about $330 million a year from the head-count reductions, including costs for compensation and benefits.
The company said it is considering further layoffs.

The savings are needed in part, because Kodak's efforts to raise cash by selling off some 1,100 digital patents aren't on track to be as lucrative as hoped. Initial bids came in well below the $2.6 billion Kodak once said the patents could be worth, and the company, which had set a goal to finish the auction in early August, now says it will pick a winner Sept. 19.

Last month, Kodak announced that it was putting a number of its businesses up for sale, including film, document imaging and scanning. Kodak grouped the businesses up for sale under "personalized imaging," which generates about $1.3 billion a year in revenue, and "document imaging," which brings in around $466 million a year.

Kodak's other unit after the reorganization will house the commercial businesses such as digital printing, graphics and services that the company intends to focus on after Chapter 11.

The company is shedding the film and camera businesses on which it build its name in favor of consumer inkjet printer and commercial printers, on which CEO Mr. Perez has long pinned the company's hopes for a turnaround.

Source: WSJ Updated September 10, 2012, 4:11 p.m. ET