Phil Faraci Out at Kodak; additional 1,000 job cuts
Tuesday, September 11, 2012
Press release from the issuing company
- Kodak Makes Organizational Changes to Align with Restructuring Plan
- CEO Perez Names Leadership for Kodak’s Three Businesses
- Launches New Cost Reduction Program and Appoints Rebecca A. Roof of AlixPartners Interim Chief Financial Officer
Antonio M. Perez, Chairman and Chief Executive Officer of Eastman Kodak Company today announced organizational changes and expanded cost structure reductions to reflect Kodak’s strategic focus on the Commercial, Packaging & Functional Printing Solutions and Enterprise Services business, and the sales processes of its Personalized Imaging and Document Imaging businesses
“Kodak is becoming a more focused and competitively scaled company,” Perez said. “We recognize that we must significantly and expeditiously reduce our current cost structure, which is designed for a much larger, more diversified set of businesses. We are reorganizing our senior management team, an action that will help accelerate the creation of a sustainable cost structure for operating our business for the benefit of our customers and position our Personalized Imaging and Document Imaging businesses for successful sales.”
Kodak said that it is making progress in the complex operational restructuring necessary for the separation of its three businesses and the consolidation of its corporate structure. The company has reduced its workforce by approximately 2,700 employees worldwide since the beginning of 2012. Kodak expects to reduce its workforce by approximately an additional 1,000 employees by the end of 2012. The annualized savings generated by these headcount reductions, including compensation and benefits, is approximately $330 million. An analysis of further operational and workforce reductions is under way.
Under the new management structure:
- The Commercial, Packaging & Functional Printing Solutions and Enterprise Services business will primarily include the Digital Printing and Enterprise (DP&E) and Graphics, Entertainment and Commercial Films (GECF) units. DP&E President Douglas J. Edwards and GECF President Brad W. Kruchten will report directly to Perez.
- Philip J. Faraci, President, is leaving the company. Perez noted that as Chief Operating Officer, Faraci played an important role in helping transform the company. With Faraci’s assistance, the company has developed excellent operational leadership processes to take forward its remaining businesses.
- Chief Financial Officer Antoinette P. McCorvey has decided to leave the company. Rebecca A. Roof, a managing director of AlixPartners, the company’s restructuring advisory firm, will become Chief Financial Officer on an interim basis, reporting to Perez. Roof has served in similar capacities for other companies that have successfully emerged from Chapter 11 restructurings, and she has deep experience in scaling overhead costs, implementing cost reduction programs, managing liquidity and raising capital, and executing asset sales – all critical areas of focus for Kodak as the company concludes its restructuring.
- Laura G. Quatela, Kodak President, will assume the additional role of President, Personalized Imaging, and lead that business through its sale process.
- Dolores Kruchten will become President, Document Imaging, to lead that business through its sale process.
- Quatela and Dolores Kruchten are expected to remain with Kodak until the sales of their respective businesses are completed in the first half of 2013.
The company will report three business segments: Digital Printing and Enterprise; Graphics, Entertainment and Commercial Films; and a new segment led by Laura Quatela that includes the two businesses for sale, Personalized Imaging and Document Imaging.
“This business structure puts the right people in the right positions to accomplish the key tasks that will help Kodak successfully emerge,” commented Perez.
“We wish Phil Faraci well. Kodak and I both owe Phil a debt of gratitude for his outstanding contribution as Kodak’s Chief Operating Officer. At this time, Phil and I have agreed that our management team must be scaled and aligned with the future size and structure of the business.”
“I also want to express my appreciation to Ann McCorvey for the substantial contributions she has made to Kodak. She is a skilled and dedicated senior executive, and as CFO, she played an important role in putting our company on the path to emergence.”
“Under this leadership structure, we are confident that we will move Kodak forward to conclude the Chapter 11 process and position the Kodak that emerges as a growing, sustainable, profitable company that continues to meet the needs of our customers.”
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