Philips to slash 4,000 jobs globally after weak quarterly earnings

Tech company Philips announced to cut off 4,000 jobs on Monday in a move to combat multiple challenges the company faces. The job cut represents over five per cent of the company's workforce. The company announced the decision after its quarterly earnings.

Philips CEO Roy Jakobs said that the difficult move is taken to improve productivity and agility, IANS reported. He added that these initial actions are needed to start turning the company around to realise its' profitable growth potential and create value for all the stakeholders.

The severance and termination-related costs are likely to be approximately 300 million euros ($295 million), said Philips. The restructuring comes as Jakobs replaced Frans van Houten earlier this month. Jakobs is cutting R&D, consolidating suppliers and warehouses, and adding dual sourcing of components.

He was put in-charge of turning the firm's Connected Care business in early 2020, managing the response to the coronavirus pandemic and the growing issues around the recall of medical devices to treat sleep apnea. Commenting on the company's challenges, Jakobs stated that although Philips' strategy and solutions resonate with our stakeholders, we have not lived up to their expectations. He added that the company would continue to review areas to improve its supply operations further and simplify the way of working while removing organisational complexity.

The company reported a net loss of 1.33 billion euros ($1.31 billion) compared with a year-ago profit of 2.97 billion euros.