More troubling to Wall Street was that Kodak, citing the soft outlook, backed away from its previous forecasts for the second half of the year. Kodak is adding to the pile too. As part of its streamlining, the company will cut 3,000 or so jobs from an already depleted workforce. As prices for digital cameras continue to fall, consumers will abandon film in greater numbers. That means Kodak's high-margin film franchise, which brings in about a third of the company's profits, will bear the brunt of the switch.
Many skittish investors agree.
In this new digital arena, Kodak isn't the yellow monster. Kodak has a lot to lose. More than 4 million digital cameras were sold in the U.S. last year, a number that is expected to nearly double in 2001 and outpace the stagnant, traditional camera market within a few years. Consumer appetite for film in the U.S. has almost peaked, at slightly more than 1 billion rolls a year. To make up for that potential lost revenue, Kodak has to persuade people to turn pixels into paper.