Eastman Kodak, the photography group, is shedding 10,000 more jobs as it speeds up its transition to digital technology following a disappointing start to the year.

The company, which began cutting 15,000 jobs last year as part of a sweeping restructuring to phase out its declining film-based business, has stepped-up cost reductions and factory closures largely in response to the faster-than-expected drop in film sales in China.

"Our disappointing start in the first half of this year makes it clear that I need to make some changes, and make them now," said Antonio Perez, Kodak's chief executive.

The announcement of job cuts came as Kodak suffered a second-quarter net loss of $146 million (€120.2 million), or 51 cents per share, compared with earnings of $136 million last year. Results reflected restructuring charges of $306 million.

Mr Perez tried to reassure investors that it was on track with its turnaround strategy. But shares in Kodak tumbled more than 7 per cent to $26.56 in midday trade. "While we are not in a position to control the rate at which traditional markets decline, there is a lot I can do about the cost structure of the traditional portfolio," said Mr Perez.

The accelerated pace of restructuring marks a sharp turn in Kodak's strategy for emerging markets. It had expected a more gradual decline in film sales.

But yesterday Mr Perez said the market in China had peaked as consumers in affluent coastal cities bought digital cameras.

Kodak said it would no longer give earnings forecasts. It plans to measure progress based on digital revenue growth, digital earnings growth and cash generation.

In the second quarter, digital sales jumped 43 per cent. In January, Kodak set out to achieve digital revenue growth of 36 per cent this year and digital earnings from operations of $275-$325 million.