Tech firm Philips on Monday announced the elimination of 4,000 jobs as the company faces “multiple challenges”, reflected in its third-quarter earnings.
New Philips CEO Roy Jacobs said the move to improve productivity and agility includes the “difficult but necessary decision to immediately reduce our workforce across approximately 4,000 roles globally, which we do not take lightly and impacted colleagues.” will apply in relation to
Job cuts represent more than 5 percent of the company’s workforce.
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“These preparatory actions are needed to begin transforming the company to realize the profitable growth potential of Philips and to create value for all of our stakeholders,” Jacobs said.
The company reported a net loss of 1.33 billion euros ($1.31 billion) compared to a year-ago profit of 2.97 billion euros.
Jacobs, who took over as CEO last week, is cutting back on R&D, consolidating suppliers and warehouses, as well as adding dual sourcing of components.
“We face many challenges and our Q3 2022 performance reflects this. While Philips’ strategy and solutions are in line with our stakeholders, we have not lived up to their expectations in recent years.”
“My immediate priority is therefore to improve execution so that we can begin to rebuild the trust of patients, consumers and customers as well as shareholders and our other stakeholders,” he said in a statement.
Jacobs says the company will continue to review areas to further improve its supply operations and simplify the way it works and removes organizational complexity.
“We will detail our plans for Philips in our fourth quarter and annual results publication in January 2023,” he said.
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