New chief executive Roy Jakobs said his “immediate priority is… to improve execution so that we can start rebuilding the trust of patients, consumers and customers, as well as shareholders and our other stakeholders”.
Jakobs said Philips would double down on patient safety and quality management, improve supply chain operations so it can better fulfill orders, and carry out a restructuring of operations to improve productivity.
“This includes the difficult but necessary decision to immediately reduce our workforce by around 4,000 roles globally,” Jakobs said.
Philips currently employs nearly 80,000 people in 100 countries.
Philips expects to make another 300 million euros in charges in coming quarters as it proceeds with the restructuring, although it expects those measures will lead to savings of a similar amount.
“These initial actions are needed to start turning the company around in order to realize Philips’ profitable growth potential and create value for all our stakeholders,” Jakobs said.
The company posted a net profit of three billion euros in the third quarter last year, but that was boosted from the sale of its domestic appliances business.
Sales came in at 4.3 billion euros in the July-September period, a drop of five percent on a comparable basis from the same time last year due to supply chain problems.
