Company expects to eliminate 1300 jobs and take $195 million chargePolaroid Corp. unveiled a broad restructuring plan last week ina move designed to improve profitability and focus the company'sresources on more promising technologies. The
Polaroid Corp. unveiled a broad restructuring plan last week ina move designed to improve profitability and focus the company'sresources on more promising technologies. The restructuring willinclude job cuts at the company's Polaroid Medical Imaging Systemsunit, which markets the Helios dry-process laser printer.
Polaroid of Cambridge, MA, announced the move Dec. 19, statingthat it expects to cut 1300 jobs throughout the company and willtake a pretax charge of $195 million. The plan is expected toreduce operating expenses by $90 million a year.
In announcing the changes, Polaroid chairman and CEO Gary DiCamillosaid the company intends to focus its resources on areas withthe greatest potential for commercialization, while bringing costsin line with near-term revenues. For example, Polaroid will scaleback manufacturing of the Captiva instant camera, which was introducedthree years ago but has not taken off as expected.
Polaroid hopes the plan will increase the likelihood that tworelatively new businesses -- medical and graphics arts -- willturn profitable sooner, DiCamillo said. In those areas, Polaroidintends to realign the infrastructure of the units to more closelyparallel their near-term prospects.
Analysts believe Polaroid is experiencing growing pains asit tries to move from its core instant-camera market into electronicimaging. The introduction of Helios was designed to help the companyin its diversification effort. The product was unveiled as a work-in-progressat the 1989 Radiological Society of North America meeting. An8 x 10 version of Helios began shipping in 1993, while a 14 x17 model began shipping in September.
Such a long product introduction cycle may have contributedto higher costs at the medical imaging business. As part of therestructuring, Polaroid intends to reduce the overhead of itsmedical operations, primarily through staff cuts, according toRobert Guenther, director of public relations.
"We built an overhead that was maybe more appropriateat a later stage of development," Guenther said. "Weare trying to get our costs back in line with our revenues. Thisis really adjusting the size of the crew to fit the ship."
Polaroid has not determined how many of the cuts will comefrom medical, nor which areas will be affected, although administrationwill most likely see job losses. Guenther emphasized that Polaroidwill try to make as many of the cuts as possible through voluntaryearly retirement programs and severance packages.
"This is a voluntary program, it's not a layoff,"Guenther said.
Polaroid remains committed to the Helios program, accordingto Guenther. Sales of the printers this year are double thoseof last year, and the product is on track to meet sales forecastsfor 1995, he said.
In addition, Polaroid recently won its largest single orderyet for Helios printers as part of its new relationship with KonicaCorp. Polaroid and Konica reached a five-year non-exclusive dealin which Konica would sell Helios in Japan under its own label.