Philips’ new boss plans to slash 4,000 jobs, equating to 5% of the Dutch technology giant's workforce, in a bid to restore its reputation following issues with some of its medtech products, Reuters has reported.
The job cuts will be part of a €300mln restructuring programme to try and cut costs and bolster productivity.
The company's chief executive Roy Jakobs, who was appointed to the role just nine days ago on 15 October, claimed the move would improve patient safety and quality management after it was forced to recall millions of devices over health worries in June of 2021.
“My immediate priority is to improve execution so that we can start rebuilding the trust of patients, consumers and customers,” Jakobs told Reuters.
He described the layoffs, which will be concentrated in the United States and the Netherlands and primarily affecting business lines with falling sales, as "unfortunate, but necessary."
Philips recalled 5.5mln ventilators in June 2021, which had been used to treat respiratory conditions including sleep apnoea, as they contained a polyester-based foam that could disintegrate over time and be breathed in or swallowed – potentially causing permanent injury.
The company confirmed the side effects included “headache, irritation, inflammation, respiratory issues, and possible toxic and carcinogenic effects.”
Philips stock, which has sunk nearly 70% since it shocked investors with the recall, were 1.7% lower at €13.04 on Monday afternoon in Amsterdam.