Polaroid Cutting 25% of Work Force

Polaroid Corp., facing a deteriorating film and instant-camera business, said it will cut about 2,000 jobs, or 25% of its global work force, over the next 18 months in a bid to reduce debt and return to profitability. The cuts will include 1,000 jobs in the United States, most of them in Massachusetts, and will hit administrative as well as line employees, the company said.

The photographic film and imaging equipment maker, whose instant-camera business has been punished by the growth of one-hour film developing shops and now digital cameras, also warned that its second-quarter results would be about the same as its operating loss of $38 million, or 85 cents a share, in the first quarter. Analysts were expecting a profit of 5 cents, according to First Call/Thomson Financial.

Cambridge, Mass.-based Polaroid said the restructuring should result in annual cost savings of between $175 million and $200 million by the end of 2003. It will take charges this year and in 2002 totaling $150 million to $175 million.

The cost-cutting plan lifted Polaroid’s beleaguered stock 20 cents, or 5.7%, to close at $3.73 on the NYSE. The stock, which was trading close to $60 in 1997, has fallen 35% since May 25, when the company unveiled a new strategic plan.