Philips to axe 6,000 jobs after loss in fall
updated 03:50 pm EST, Mon January 26, 2009
Philips to cut 6,000 jobs
Philips Electronics said it will cut its global workforce to the tune of 6,000 because it posted the first quarterly loss in about six years, according to a Monday report. At the same time, the company stopped the buy-back program of its shares. The 1.47 billion Euro ($1.9 billion) loss in the fourth quarter of 2008 is partly due to a write-down of Philips' Lumildes diode light business as well as the downgrading of its shares in NXP Semiconductors and LG Display. Net losses for 2008 amounted to 186 million Euros (nearly $242 million).
Philips' president and chief executive, Gerard Kleisterlee, says the fourth-quarter losses are due to the soft economy that saw a record-low demand for the company's products, with the hardest hit businesses being its lifestyle and lighting divisions. As a result, Kleisterlee says Philips' management is giving "absolute priority to cash flow, where necessary at the expense of operating profits."
Philips has cut 3,000 jobs in the fourth quarter, and will cut another 6,000 positions during 2009, which would cost 400 million Euros ($525 million).
