ROCHESTER, N.Y. -- Eastman Kodak Co. continued internal cost-cutting measures Tuesday, naming International Business Machines Corp. to design, build and manage a new data center for the photographic products giant.
The announcement came one day after Kodak announced a $225 million charge against second-quarter earnings to pay for job reductions and corporate restructuring.
Under the agreement with IBM, the new data center will be owned by IBM and operated by IBM employees. About 275 Kodak employees currently working in the company's information processing operations will be offered jobs at IBM, said Kodak spokesman Paul Allen. Terms of the deal were not disclosed.
'We aren't looking at any layoffs and the Kodak employees' offer should be very attractive,' Allen said.
The new center will be established in Rochester at a location yet to be announced. It is expected to be completed in two years.
The new center will consolidate four existing Kodak data-processing centers, three in Rochester and one in Windsor, Colo.
'We're looking at significant cost savings. Analysts tell us savings can be up to 40 or 50 percent. Of course, some may be for IBM, but we expect it to help,' Allen said.
The data center will provide technical and operational support of storage data, using state-of-the-art IBM software and hardware. IBM also will be responsible for security and disaster recovery for Kodak information processing.
In a prepared statement, David McDowell, IBM vice president and president of the National Service Division said, 'We are confident the results of this partnership with Kodak will become a showcase for the entire information processing industry.'