Eastman Kodak, the producer of photographic film, has said it is to cut 3% of its workforce because people are not taking as many holiday pictures as before.

The US-based film maker said up to 2,900 jobs would have to go in the US and Europe as it attempts to overcome the global slump in travel.

Kodak added it would take a charge between $75m and $100m during the year to cover the job losses.

It also lowered its forecast for 2003, citing ongoing economic weakness and increased use of digital photography, which affects sales of conventional film.

Gloomy outlook

For the fourth quarter, Kodak earned $113m compared to a $206m loss a year earlier, when it took a $262m restructuring charge.

Revenues in the fourth quarter totalled $3.44bn, up from $3.36bn in the same period a year earlier.

Investors were not impressed with the update.

Kodak shares fell $2.79, or 7.4% , to $34.80, in early morning trading on the New York Stock Exchange.

Some analysts were sceptical about Kodak's outlook for the future.

"You have to wonder where the revenue build is going to come from, with weak consumer spending, geopolitical problems potentially holding down tourism, and fewer pictures being taken," said Pittsburg Research analyst Steven Artuso.