Philips, a Dutch health technology business, stated Monday that it will reduce another 6,000 employees globally in order to increase profitability.
The layoffs will take place over the following two years, with the first 3,000 being made this year, according to the Dutch consumer electronics and medical equipment manufacturer. In its results report, the corporation recorded a net loss of 1.6 billion euros in 2022, down from a net profit of 3.3 billion euros the previous year.
“2022 has been a very challenging year for Philips and our stakeholders, and we are taking bold steps with haste to strengthen our execution and step up performance,” said CEO Roy Jakobs in a statement.
Since Jakobs took over in October to assist the company turn around its business, which had been suffering from a recall of its sleep apnea appliances. Monday’s news brings the total number of job cutbacks to 10,000 as the new reorganization comes on top of a plan announced last October to reduce its workforce by 5%, or 4,000 jobs. Philips also faced economic headwinds such as COVID-related concerns in China and the Ukraine crisis.
“When I took over as CEO in October 2022, I stated that our priorities are first to strengthen our patient safety and quality management and address the Philips Respironics recall; second, to improve our supply chain reliability in order to convert our order book to sales and improve performance; and third, to simplify how we work in order to increase agility and productivity,” Jakobs continued.
The new changes, according to Jakobs, will allow the firm to become leaner and more focused with a significantly reduced cost structure.
According to Reuters, the recall issued in 2021 reduced the company’s market worth by more than half. The foam included within the gadgets, which were sold all over the world, constituted a health danger, including poisonous and cancerous consequences.