Philips cuts 6K more jobs to improve profitability
Philips cut a total of 10K roles since October 2022
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Philips announced Monday that it's cutting another 6,000 jobs worldwide as it works to boost profitability.
The workforce reduction will occur over the next two years with the first 3,000 cuts taking place this year, the Dutch consumer electronics and medical equipment maker said on Monday. In its earnings report, the company revealed it suffered a net loss of 1.6 billion euros in 2022, which is down from a net profit of 3.3 billion euros last year.
"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," CEO Roy Jakobs said in a statement.
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Monday's news brings the total number of job cuts to 10,000 since Jakobs took over in October to help the company turn around its business, which had been reeling from a recall of its sleep apnea machines. Philips also grappled with economic headwinds including COVID-related issues in China and the war in Ukraine.
Philips office building in Warsaw, Poland on July 29, 2021. (Beata Zawrzel/NurPhoto via Getty Images / Getty Images)
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Shortly after taking over, Jakobs axed 4,000 roles.
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"When I took over as CEO in October 2022, I said that our priorities are first to further strengthen our patient safety and quality management and address the Philips Respironics recall; second, to improve our supply chain reliability to convert our order book to sales and improve performance; and third, to simplify how we work to increase agility and productivity," Jakobs continued.
According to Jakobs, the latest cuts will enable the company to become leaner and more focused with a significantly reduced cost structure.
More than half of the company's market value was knocked off due to the recall that was issued in 2021, according to Reuters. The foam inside the devices, which were sold worldwide, posed a health risk, including toxic and carcinogenic effects.
The Associated Press contributed to this report.