Dutch manufacturer of medical devices Phillips has decided to extend the workforce adjustment announced last October, when it announced the cut of 4,000 jobs, to another 6,000 workers, raising up to 10,000 troops the reduction of its workforce by 2025, after registering losses of 1,608 million euros in 2022 due to the impact of the respirator crisis.
In this sense, the multinational has indicated that, in addition to the reduction of its workforce by 4,000 workers announced in October 2022, will remove 6,000 additional features globally by 2025, of which 3,000 will be implemented by 2023 in accordance with local regulations and processes.
“The simplified operating model will make Philips more agile and competitive,” defended the company, which hopes to achieve a “significantly reduced” cost structure through a more efficient and focused organization.
In a statement, Philips has indicated that, despite operating in attractive market segments that grow between 3% and 6% annually and with margins above 16%, “it is not capitalizing on the full potential of these strong market positions , since it faces a series of major operational challenges, as reflected in their 2022 performance.”
In this way, the multinational will address the challenges, improve its performance and drive the progressive creation of value through an organic growth strategy focused on improved execution in three priorities: 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 in a progressive path towards value creation“said Roy Jakobs, CEO of Philips.
Results
On the other hand, the company announced this Monday that in the whole of 2022 it registered losses of 1,608 million eurosin contrast to the attributable net profit of 3,319 million of the previous year
In turn, Philips’ annual sales increased by 3.9%, up to 17,827 million, while the net debt of the company reached 7,028 million, 50.3% more.
By divisions, the diagnostic business increased its annual sales by 6.2%, up to 9,168 million, and the health area improved its income by 5.7%, up to 3,626 million. However, the connected care business reduced its turnover by 3.7%, to 4,403 million.
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Between October and December, Philips recorded losses of 106 million euros, compared to net attributable profit of 157 million of the fourth quarter of 2021, while its sales grew by 9.7%, to 5,422 million.
“2022 has been a very difficult year for Philips and our stakeholdersand we are taking strong steps to improve our execution and increase performance urgently,” Jakobs admitted.