New Philips CEO lays off 4,000 employees

Electronics manufacturer Philips has announced the layoff of around 4,000 employees. The company announced this during the presentation of its current quarterly figures. The reason for this is declining sales and the recall of ventilators due to a production error.

After just a few days in his new position, the new Philips CEO Roy Jakobs announced that around 4,000 employees would be laid off. That comes from one official notice of the electronics manufacturer on its current quarterly figures.

The reason for the job cuts is therefore declining sales figures and massive price losses that can be traced back to a product recall. According to Philips, in order to remain competitive, it must therefore significantly reduce its costs.

Philips: Decline in sales and massive loss

The job cuts will affect around five percent of the entire workforce. After all, Philips recently employed around 77,000 people. For the third quarter of 2022, the company is also recording a drop in sales of around five percent.

This corresponds to the fifth decline in sales in a row. But compared to the previous year, the bottom line is a loss. Because in 2021, the electronics manufacturer was still making a profit of 358 million euros. This year, however, the company has a deficit of 1.5 billion euros.

Recall due to a manufacturing defect leads to mass layoffs

According to Philips, the reason for the significant loss is the costly recall of ventilators. Background: Im June the company recalled around 5.5 million ventilators against breathing pauses during sleep. According to Philips, there were concerns at the time that the foam used during production in the devices would decompose over time and become toxic.

At the time, the electronics manufacturer announced close cooperation with the authorities and that the company wanted to focus on replacing and repairing the so-called sleep apnea devices. Since then, the Philips share has lost around 60 percent.

Also interesting: