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Philips cuts 6,000 jobs due to losses caused by the failure of its respiratory devices


The Dutch multinational already cut another 4,000 jobs last October, and suffered net losses of 1,605 million euros in 2022

The Dutch multinational electronics company, Philips, is once again cutting jobs worldwide.

Over the next two years, it will cut 6,000 jobs, 1,100 of which will be lost in the Netherlands.

In 2022, the company had net losses of 1,605 million euros due, in part, to the expenses caused by the withdrawal, in 2021, and replacement of some 5.5 million of its devices for sleep apnea, from the range Respironics.

They could cause damage to health due to the foam used to muffle the noise, susceptible to being inhaled in the form of particles.

The company already got rid of another 4,000 workers last October.

More information

The 'winter' comes to technology: layoffs, spending cuts and stock market falls

With both adjustments, Philips will cut a total of 10,000 jobs, and it is the second such announcement made by Roy Jakobs, its new chief executive.

In 2022, he had been in office for just nine days when he filed for the first job reduction.

The multinational pointed out that same year that the business unit that manufactures the devices for apnea had dropped in value, and set aside 1,300 million euros to cover the costs of possible lawsuits in court by users.

“The decision [of the current job cut] is difficult, but necessary.

Given the challenges faced by our operations, we are not being able to extract the full value of our business, and this is reflected in last year's results," Jakobs said in a statement.

Sales increased by 3.9%, up to 17,827 million euros,

thanks to fewer problems in the supply chain.

Net debt reached 7,028 million, 50.3% more.

According to data from the firm, at least 5.5 million of these fans have left the world market, as well as 17 million of the masks that are included.

These need to be washed, and may release foam particles that can be inhaled when used.

Withdrawn from the market in June 2021 due to the risks that this posed to health, these devices have an airflow system to keep the breathing of people with apnea stable, who suffer respiratory pauses during the night due to a collapse of the airway.

The mask provides the necessary air and has a polyester-based foam to reduce noise, which is susceptible to degradation.

The particles thus generated can be inhaled by the user,

according to the alert published in June 2021 by the Spanish Agency for Medicines and Health Products (AEMPS).

According to research by the Dutch multinational, "the possibility that users of apnea devices have suffered damage is very small."

The bulk of these sales were made in the United States, and the multinational has inspected 60,000 devices in that market, 2,500 in Europe and another 2,000 in Japan.

Founded in 1891 in the city of Eindhoven, Philips has specialized in medical technology, and plans to dismantle the marketing department at its Amsterdam head office.

He will do the same with the Eindhoven research section.

In this way, up to 90% of the research and product development projects will be carried out in the factories themselves.

With some 77,000 employees worldwide, the Netherlands will continue to be "the center of gravity" of the company's activities, according to the announcement on Monday.

The unions were informed this Sunday of the cut, which they have described as "tremendous".

They have asked for a five-year labor guarantee for workers who have not lost their job.

Source: elparis

All business articles on 2023-01-30

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