Philips to cut a further 6,000 jobs
Summary
- Health-technology company swings to a fourth-quarter loss as costs rise
Royal Philips NV said it would cut an extra 6,000 jobs by 2025, including 3,000 this year, as part of a reorganization aimed at improving its performance, adding to a wave of corporate layoffs in recent weeks.
The Dutch health-technology company said Monday that a simplified operation model would help make it more agile and competitive while reducing costs. The job cuts are in addition to the 4,000 roles it said it would eliminate in October.
A string of big companies have outlined plans to cut thousands of jobs so far this year as they adjust to slowing growth or respond to weaker demand for their products.
The cuts at Philips, which sells products including MRI scanners and ultrasound machines, come as the Dutch company has grappled with supply-chain challenges, lower sales in China and the fallout from the Russia-Ukraine war. Philips has also had to contend with the consequences of a huge recall of devices used to treat sleep apnea.
Philips disclosed the job cuts as it reported a swing to a net loss for the fourth quarter amid higher costs. The company said its net loss for the period came in at 106 million euros, equivalent to $170.6 million, compared with a profit of €157 million for the fourth quarter of 2021.
Sales for the quarter rose to €5.42 billion from €4.94 billion in the same period last year as the supply of components improved.
For the full year, sales fell 3% on a comparable basis to €17.8 billion. Philips reported a net loss for the year of €1.6 billion, compared with a €3.3 billion profit the prior year, hurt by a previously disclosed write-down of its sleep and respiratory-care business. The prior year’s profit was boosted by the sale of the company’s domestic appliances business.
“2022 has been a very difficult year for Philips and our stakeholders, and we are taking firm actions to improve our execution and step up performance with urgency," Chief Executive Roy Jakobs said in a statement.
Monday’s cuts mark the second time Mr. Jakobs has announced layoffs since the longtime Philips employee took the top job in October.
The “difficult but necessary further reduction" is part of a broader plan to reinvigorate the company’s performance alongside strengthening patient safety and quality management and enhancing supply-chain reliability.
Looking ahead, Philips said it expects low-single-digit comparable sales growth for this year. The company said it anticipates a slow start to the year, considering the slowing of consumer demand, but for a gradual improvement in the order book conversion during 2023.
This story has been published from a wire agency feed without modifications to the text
