By BridgeNews In its second restructuring this year, Polaroid Corp. is phasing out 2,000 positions over the next year and a half as the photography giant shifts its focus from instant cameras and film to digital imaging. "This is an extremely difficult decision, but an absolutely necessary one if Polaroid is to compete in the digital future," says Gary DiCamillo, chairman and CEO of the Cambridge, Mass.-based company. The spread of digital cameras has undermined demand for instant photography products, which account for about 75% of Polaroid's sales. The company also said the instant business is declining faster than expected due to the soft economy. With less demand for instant cameras and film, Polaroid continues to consolidate and reduce the facilities and operations dedicated to the instant business. The company said it is maintaining the instant business for cash and profitability while developing its digital business, which has much stronger potential for growth. "Our infrastructure clearly is too big, and the changes in our business require a significant reduction of our cost base in line with our conservative revenue expectations for the next two to three years," says Ian Shiers, Polaroid's executive vice president of worldwide sales and marketing. The 2,000 job cuts, which will affect 25% of Polaroid's workforce, are in addition to 950 job losses that the company announced in February. The company plans to have 5,500 employees by the end of 2002, compared with the 9,274 it had at the end of 2000. To pay for the restructuring, Polaroid will take charges between $150 million and $175 million in 2001 and 2002. The moves will allow the company to realize annual savings between $175 million and $200 million by the end of 2003.