Global technology company Philips recently announced plans to reduce its global workforce by 6,000 positions by 2025, with around 3,000 people set to receive “pink slips” by the end of the year. Specifically, the company says 1,100 employees in the Netherlands will be affected, tech eu writes.
Philips CEO Roy Jacobs said that due to significant operational challenges, the company is not extracting the full value of its business and therefore is having to take drastic measures.
The move is in conjunction with the company’s new growth strategy, which, among a number of actions and transformations, identifies the Philips Innovation Centre in Eindhoven as a hub for breakthrough innovation.
However, in order to become a leading company in healthcare technology, the new strategy envisages doubling the company’s efforts in the image-guided therapy, monitoring, ultrasound and personal health business segments, expanding the enterprise informatics business segment, improving the imaging business and rebuilding the sleep and respiratory care business segment.
According to Philips, to lead these segments, it is shifting 90% of its R&D resources to these businesses, up 20% from 2022.
Philips, which employs about 77,000 people, has suffered losses of 1.53 billion euros ($1.66 billion) in 2022. Meanwhile, the company generated total sales of 17.8 billion euros last year.
Roy Jacobs added that the job cuts “will put Philips on a progressive path to value creation with sustainable impact to achieve mid-single digit comparable sales growth.”
The hardest hits are expected to fall at the head office in Amsterdam and in the town of Best in the province of North Brabant, where the company’s innovation centre is located.