Following the recall of faulty sleep respiratory devices that knocked off 70 per cent of its market value, the Dutch health technology company Philips is planning to further trimming its workforce to restore profitability. The company on Monday announced that it would scrap around 6,000 jobs.
The company said that half of the job cuts will be made this year, adding that the other half will be by 2025. Chief Executive Officer Roy Jakobs said that it was 'difficult, but necessary' decision.
The new reorganisation comes on top of a plan announced in October last year to reduce its workforce by 5 per cent or 4,000 jobs. The company was battling to restore its profits from the recall of ventilators used to treat sleep apnoea over worries that foam used in the machines could become toxic.
"Philips is not capitalising on the full potential of strong market positions as it faces a number of significant operational challenges," Jakobs was quoted by Reuters.
The simplified organisation should also improve patient safety and quality and supply chain reliability, he added.
He also said that the company will continue to invest 9 per cent of sales in research and development, but will focus on "fewer, better resourced, and more impactful projects."
Amsterdam-based Philips also reported fourth-quarter adjusted earnings before interest, taxes and amortisation (EBITA) of 651 euros, nearly stable from 647 million euros a year before, reported Reuters.Â
