In New Delhi: As it presented its third quarter financial results today, the multinational technology corporation Philips said it will eliminate 4,000 positions in order to “enhance efficiency and boost agility.”
According to a statement from Philips, operational and supply issues had an impact on Q3 sales.
According to the report given on October 12, group sales were 4.3 billion euros, with a 5% fall in comparable sales.
The process to increase productivity and agility, according to Philips CEO Roy Jakobs, “includes the difficult, but necessary decision to immediately reduce our workforce by around 4,000 roles globally. We do not take this decision lightly and will implement it with respect toward impacted colleagues.”
To fulfil Philips’ potential for profitable development and to generate value for all of our stakeholders, these first steps are necessary, according to Mr. Jakobs.
Operational and supply issues, inflationary pressures, the COVID situation in China, and the Russia-Ukraine war all had an influence on Philips’ performance during the quarter.
Operating cash flow was reduced by 180 million euros, mostly as a result of lower cash profits, increasing inventory, and higher provision usage.
Following a strong 47% increase in Q3 2021, comparable order intake decreased by 6%. Throughout the quarter, the order book for equipment grew, and the book-to-bill ratio was 1.18.
According to Philips, the reductions will affect around 5% of its personnel, and the business will record severance and termination-related costs of about €300 million ($295 million) in the upcoming quarters. The corporation made the announcement about a week after Roy Jakobs succeeded Frans van Houten, who had served as CEO for 12 years.
According to Jakobs, Philips’ top aim is “improving execution so that we can start regaining the trust of patients, consumers, and customers.” These actions include “urgently upgrading our supply chain operations” as well as “strengthening patient safety and quality control.”