Philips plans to cut 6,000 more jobs amid cost-cutting push, costly recall of devices
Royal Philips NV is cutting another 6,000 jobs, or around 8 percent of the total, as the maker of medical equipment embarks on a cost-cutting push while wrestling with costly recalls of consumer medical devices.
The reductions, half of which will be implemented in 2023, come on top of 4,000 job cuts already announced last year, a plan Philips said would result in about $326 million (€300 million) in costs in the coming quarters.
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“We are taking firm actions to improve our execution and step up performance with urgency,” Chief Executive Officer Roy Jakobs said on Monday in a statement. “This is a step-by-step improvement journey.”
The CEO is cutting expenses to help offset charges linked to the manufacturer’s faulty sleep therapy devices. Philips started its first recall of the products in June 2021 and has set aside about €885 million after researchers linked their degrading foam to cancer and respiratory issues. The company said on Monday it’s increasing the provisions by €85 million.
Philips expects to deliver low single-digit comparable sales growth and a high single-digit adjusted operating profit margin this year. The company also reported better-than-expected sales and operating profit in the fourth quarter.
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