Status: 10/24/2022 11:07 am
The medical technology manufacturer Philips, which has come under pressure because of problems with ventilators, wants to cut around 4,000 jobs. The company wants to use this to reduce its high costs.
The new Philips boss Roy Jakobs cuts 4000 jobs worldwide. The step of parting with five percent of the workforce as quickly as possible was “difficult but necessary” and not easy for him, explained Jakobs, who replaced long-time boss Frans van Houten in mid-October. It is about Philips working better again and regaining the trust of patients and customers.
Problems in the sleep and ventilation division are currently costing the medical technology group a lot of money: Philips has to write off 1.3 billion euros in this segment. The company is struggling to recall and replace certain ventilators, and has set aside millions in provisions to do so. In June last year, the US subsidiary Philips Respironics had to recall some sleep and ventilator devices.
Group reorganization planned
Jakobs now wants to restructure the group. The steps included strengthening patient safety and quality management, and urgently improving supply chain operations.
It is not yet known where Philips wants to cut the jobs. The plans should be explained in the figures for the fourth quarter, it said. The company has locations in Germany, including in Aachen and Böblingen, and the German headquarters are in Hamburg.
Loss of billions in the third quarter
The competitor of Siemens Healthineers announced today that the expenses for severance payments and terminations are expected to amount to around 300 million euros and will be incurred in the coming quarters.
In the third quarter, Philips posted a net loss of 1.5 billion euros. The operating result (EBITA) fell by 60 percent to 209 million euros and thus more than expected by analysts. On a like-for-like basis, Group sales fell by six percent to EUR 4.3 billion. Shares in the healthcare giant have also lost around 60 percent in value this year due to the numerous problems.