Medical tech company Philips is to cut 6,000 jobs worldwide, including 1,100 in the Netherlands. Its recent annual figures also show that the company posted three percent lower sales in 2022 than a year earlier.
The mass layoffs were unavoidable, according to the medical tech conglomerate, because of the disappointing results and also the continuing problems surrounding its apnea devices. These devices can emit harmful substances and therefore had to be taken back for modification.
In addition, Philips suffers greatly from the lack of processors and other special components. This prevents the company from delivering certain equipment on time.
6,000 jobs gone
6,000 jobs will be lost worldwide until 2025, Philips says. Of these layoffs, 3,000 are to be made as early as this year. The layoffs now announced are in addition to a previously announced 4,000 job losses at the tech conglomerate.
In the Netherlands, 1,100 jobs will be lost. These jobs will be lost at the headquarters and the research department in Eindhoven. The company’s production sites in Drachten and Eindhoven (Best) will be spared. These 1,100 layoffs are in addition to the 800 that are part of the earlier 4000 worldwide layoffs.
In addition, Philips is pursuing a simplified operations model in line with local laws, regulations and processes. These cuts should make the tech group more flexible and competitive, the thinking goes. This would allow it to develop better products for customers, patients and consumers. This is based on a small number of set targets.
Lower annual figures 2022
In addition to the round of layoffs, Philips also announced its full-year figures for 2022 and quarterly earnings for the fourth quarter of that year. In total, the tech conglomerate managed to record a revenue of 17.8 billion euros. This was 3 percent less than in 2021. The net loss totaled 1.6 billion euros. Reasons for the lower sales and loss included operational and supply challenges, lower sales in China, the effects of the apnea device recall and the war in Ukraine.
As a bright spot, Philips posted higher-than-expected sales in the fourth and final quarter. In total, the tech group credited sales of 5.4 billion euros in this particular quarter. This was mainly due to the fact that the shortage of parts decreased in that quarter.
For this year, Philips expects a small sales growth of between 1 and 3 percent. However, the tech conglomerate does not give specific amounts at which these sales may come out.