Qualex cuts deep as business slows

Kodak subsidiary once employed 550, will keep 15-20

About 50 workers - more than two-thirds of its staff -- are being laid off at the Durham headquarters of Qualex.

The film processing subsidiary of Eastman Kodak employed 550 locally just four years ago. But business has been dwindling as advances in technology made their services obsolete. Now, no longer profitable, it is eliminating 300 jobs companywide, and will end up with just 15 to 20 workers in Durham, Kodak spokesman Christopher Veronda said.

The moves include shutting down Qualex's three remaining film-processing laboratories in Texas, Pennsylvania and Ontario. Qualex once had more than 50 central film-processing labs that developed photos for retailers.

"This announcement certainly is not a reflection on the dedication and skill of Qualex employees, who have worked diligently to serve customers," Brad Krutchen, Kodak vice president and general manager of retail printing solutions, said in a prepared statement. "The timing is unfortunate, but we wanted to let them know of this decision as soon as possible."

The cuts are expected to be mostly completed by the end of March, when pickup and delivery to retail outlets will be discontinued.

Last week, Kodak trimmed its sales and profit forecasts -- for the second time in six weeks -- saying "the company has seen the dramatic slowdown in consumer spending continue and worsen." That has hurt demand for its digital cameras and printers.

The remaining Qualex employees in Durham will work in the company's Event Imaging Solutions division, which provides seasonal photos -- such as pictures at the mall of adorable Hannah on Santa's knee -- as well as photos at theme parks.

The emergence of digital photography was a big factor in the demise of Qualex's film-processing operation, but the 20-year-old business has been eroding since one-hour photo labs became popular, Veronda said.

The company's biggest job cuts came in November 2004 when it eliminated 300 jobs because of a series of double-digit declines in annual film-processing revenue.

Employees affected by the latest cuts will receive severance packages and outplacement assistance.