philips fires 6,000 employees just months after laying off 4,000
Embattled Dutch medical tech maker Philips, who started as a lighting company more than 130 years ago, said on Monday it will slash 6,000 more jobs worldwide to restore the company’s profitability on the back of a massive recall of faulty sleep respirators. The announcement was made just three months after the company unveiled another 4,000 cuts.
The Amsterdam-based firm saw net losses of $114 million in the fourth quarter of 2022 and over $1.7 billion in the last year as a whole, majorly due to the global recall in 2021 of its appliances to treat people suffering from sleep apnoea.
This followed major concerns raised over patients risking “possible toxic and carcinogenic effects” if they swallowed or even inhaled pieces of degraded sound-dampening foam on the machines.
Chief Executive Roy Jakobs announced in a statement the “difficult, but necessary further reduction of our workforce” by 2025.
“When I took over as CEO in October 2022, I said that our priorities are first to further strengthen our patient safety and quality management and address the Philips Respironics recall; second, to improve our supply chain reliability to convert our order book to sales and improve performance; and third, to simplify how we work to increase agility and productivity.”
Almost 3,000 new layoffs would be made this year.
While Philips initially focused on lighting products, systems, and services, it has undergone substantial transitions in recent years, selling off assets to focus on making high-end electronic healthcare products. But that transition has been called into question by the massive recall of faulty sleep respirators that have pushed the company into loss and even seen the previous CEO resign.
The layoffs have come at a time when the global economy is going through a tumultuous economic slowdown. What started last year as tech layoffs have now gradually proliferated to other sectors, leading to several companies laying off a major portion of their staff to cut costs.
Microsoft, Google, Twitter, Amazon, and Meta used to be considered one of the safest places to work, but not anymore. In recent months, the five tech giants have fired more than 50,000 employees, drawing strong criticism.