The Dutch Philips, manufacturer of medical equipment, will lay off an additional 6,000 employees over the 4,000 announced in October after losing 1.6 billion euros in 2022, as announced on Monday. In this way, it will cut 10,000 troops by 2025, 13% of the workforce, impacted by the crisis of its defective respirators.
Up to 3,000 of the departures will take place throughout this year. "The simplified operating model will make Philips more agile and competitive," the company has defended, which hopes to achieve a "significantly reduced" cost structure through a more efficient and focused organization.
The company will prioritize its organic growth based on patient safety and quality, supply chain reliability and a simplified and more agile operating model. "I am confident that these comprehensive actions will put Philips on a progressive path towards value creation," said Roy Jakobs, CEO.
You need it: in 2022 it registered losses of 1,608 million euros, in contrast to the attributable net profit of 3,319 million the previous year. Sales rose 3.9% to $17.827 million, instead of the 5% drop expected by analysts, thanks to fewer supply chain issues. Net debt reached 7,028 million, 50.3% more. "2022 has been a very difficult year for Philips," admitted Jakobs. "We are taking strong steps to improve our execution and increase performance urgently," he added.
The main problem lies in the problems of their machines for the treatment of apnea. A foam used to muffle noise was found to disintegrate and enter the ventilation system, posing a cancer risk when inhaled. After provisioning 885 million in its day for the recall of the devices, now it adds another 85 million.
With its decision, Philips joins a growing number of manufacturers cutting costs to cope with instability and inflation in the supply chain.
