Philips intends to execute half of the job cuts this year, and the other half by 2025, to mitigate the losses incurred due to the recall of respiratory devices that slashed 70% of the company’s market value
Philips to cut another 6,000 jobs. (Credit: Koninklijke Philips N.V.)
Dutch health technology company Philips has reportedly announced its plans to axe additional 6,000 jobs worldwide, as part of the company’s restructuring process.
Through the job cuts, Philips aims to restore profitability and improve the safety of its products following a recall of respiratory devices that slashed 70% of its market value.
The medical device maker will execute half of the job cuts this year, with the other half planned to be realised by 2025.
Roy Jakobs became the new CEO of Philips in October last year, a time when the company was badly hit by the recall of certain respiratory devices.
In June 2021, Philips announced a global recall of its sleep respirators, based on rising concerns over consumers’ safety while using the product.
The company agreed to repair and replace the sleep and respiratory care devices that were recalled by the US Food and Drug Administration (FDA) in June.
Last year, the company has recalled its V60/V60 Plus and V680 ventilators product range, a few Bilevel PAP, BiPAP or BPAP machines, and certain CPAP or Bi-Level PAP therapy masks with magnetic components, over safety concerns.
In October last year, Jakobs announced his plans to cut around 4,000 jobs to mitigate the decline in sales and market value after a massive recall of ventilators.
The current announcement brings the total job cuts announced by Roy Jakobs to 10,000, which represents around 13% of the company’s current workforce.
Philips joins other tech companies including Google, Microsoft, Amazon, and German software firm SAP to make layoffs to cut costs.
Jakobs told Reuters: “What we present today I think is a very strong plan to secure the future of Philips. The challenges we have are serious and we are addressing them head-on.
“Patient safety would be put squarely at the centre of the new organisation. To improve profitability while investing in safety, innovations will be targeted at fewer, better resourced and more impactful projects.”