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Philips axes 6,000 employees in a second round of job cuts

Philips' headquarters in Amsterdam

Philips has confirmed 6,000 more job cuts in a bid to bring back profitability. 

The announcement came after a disastrous recall of respiratory devices that cost the company 70 percent of its market value.

The Dutch giant plans to implement half of the cuts this year, while the remaining half will be completed by 2025.

READ MORE: SAP ANNOUNCES JOB CUTS THAT WILL HIT 3,000 PEOPLE GLOBALLY

CEO Roy Jakobs said it was a “necessary intervention to help us to become competitive and lean in the way we go forward in the market.

“We have been working very hard to refocus on health technology, and we have now built a very strong portfolio there where we have 70 percent of number one or two positions.

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“But we have not been extracting the value out of those segments because we did not execute well. 

“So the strategy I present today is very much focused on organic growth, focusing on the portfolio that we have and getting the most out of them.”

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The restructure follows a plan announced in October to shrink its workforce by five percent, or 4,000 employees.

The firm is dealing with the impact of the recall of millions of sleep apnea ventilators due to concerns that the foam used in the equipment might become hazardous.

The company hopes the reduced workforce should result in a profit margin in the low teens by 2025, and a margin in the mid-to-high teens after that year, with mid-single-digit comparable sales growth throughout.

Jakobs noted that the streamlined organization should enhance patient safety, quality, and supply chain reliability.

Philips, headquartered in Amsterdam, also posted fourth-quarter adjusted profits before interest, taxes, and amortization of 651 million euros ($707.18 million), nearly unchanged from 647 million euros the previous year.

Source: CNBC


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