Dutch health technology company Philips (PHG.AS) joins the layoff bandwagon. On Monday it announced to lay off to 6000 jobs to restore its profitability following a recall of respiratory devices that knocked off 70% of its market value.
Half of the job cuts will be made this year, the company said, adding that the other half will be realised by 2025. A total of 3,000 of the new job cuts would be made in 2023.
The cut off comes against the backdrop of a plan announced last October to reduce its workforce by 5%, or 4,000 jobs, as it grapples with the fallout from the recall of millions of ventilators used to treat sleep apnoea over worries that foam used in the machines could become toxic.
The Amsterdam-based firm unveiled net losses of 105 million euros ($114 million) for the fourth quarter of 2022 and 1.605 billion euros for last year as a whole, largely due to the recall.
Jakobs, who took over in October, said Philips needed to “improve performance and simplify our way of working to improve our agility and productivity.”
“Philips is not capitalizing on the full potential of strong market positions as it faces a number of significant operational challenges,” Chief Executive Officer Roy Jakobs said.
He further said that the company will continue to invest 9% of sales in research and development, but will focus on “fewer, better resourced, and more impactful projects.
Starting off as a lighting company more than 130 years ago, Philips has undergone major changes in recent years, selling off assets to focus on making high-end electronic healthcare products.