Bloomberg Dutch health technology company Philips said Monday it will cut 6,000 jobs in 2025 to restore its profitability after a recall of its breathing devices shrank its market value by 70 percent. The company said it will complete half of the job cuts this year and the other half by 2025.
This new restructuring builds on a plan announced last October to reduce its workforce by 5 percent, or 4,000 jobs. At the time, Philips recalled millions of ventilators used to treat sleep apnea after discovering that the foam used in the machines could be toxic.
Roy Jakobs, Philips’ new CEO, said, “Philips is not taking full advantage of the potential of its strong market position as it faces a number of significant operational challenges.”
Philips recently reported its fourth quarter and full-year results for 2022. Group sales for the fourth quarter reached EUR 5.4 billion (currently approximately RMB 39.69 billion), with comparable sales up 3%, driven by improved component supply; comparable order intake down 8% due to lower demand for new crown-related products; and fourth-quarter operating profit of EUR 171 million, up 5.6% year-on-year.
Fourth-quarter adjusted EBITA was up 0.6 percent to 651 million euros. For the full year, Group sales were €17.8 billion, with comparable sales down 3% and adjusted EBITA down 35.8% to €1,318 million (currently approximately RMB 9,687 million) due to operational and supply challenges and lower sales in China.