In a dramatic move designed to significantly cut costs, electronics company Philips has announced that it will be cutting 4.000 jobs around the world, 400 of which will be in the Netherlands.
In its most recent financial report, Philips revealed that, for the fifth quarter in a row, it was suffering from a fall in profits and sales. The international company - known largely for its contribution to healthcare and home appliances - expects this trend will continue into the next quarter, forcing it to take drastic action to significantly reduce costs.
Philips employs almost 80.000 people worldwide, with 11.000 employees based at the company’s offices in Eindhoven, Drachten and Best. In total, 800 jobs in the Netherlands will disappear or be absorbed, largely by not renewing temporary work contracts, but around 400 people will lose their jobs through forced redundancies.
The company has faced various delivery and financial difficulties over the past several years, also as a result of increased pressure during the coronavirus pandemic and the ongoing war in Ukraine. One key reason for the reshuffle is a recall of millions of faulty sleep apnoea devices earlier this month, costing the company millions in legal and logistical fees.
Philips saw turnover fall by 5 percent, or 1,3 billion euros, in the third quarter of 2022. The major reshuffle is expected to cost the company 300 million euros, but in the long term should save the company the same amount of money every year. It's not yet clear whether further redundancies should be expected in the new year.