Dutch consumer electronics and medical equipment maker Philips said Monday it is cutting 6,000 jobs worldwide over the next two years as it revealed a net loss of 1.6 billion euros ($1.7 billion) in 2022, down from a net profit of 3.3 billion euros last year.
The job losses come on top of a reduction of 4,000 staff the company announced in October.
The company, which has its headquarters in Amsterdam, is reeling from a worldwide recall of sleep apnea machines and economic headwinds including COVID-related issues in China and the war in Ukraine.
CEO Roy Jakobs said 2022 was “a very difficult year for Philips and our stakeholders, and we are taking firm actions to improve our execution and step up performance with urgency.”
He said the job cuts will significantly reduce costs and make Philips a “leaner and more focused organization.”
It also adds to the string of technology-based firms to make layoffs, after companies including Alphabet’s Google (GOOGL.O), Microsoft (MSFT.O), Amazon (AMZN.O) and German software maker SAP (SAPG.DE) announced thousands of layoffs to cut costs as they brace for tougher economic conditions.
Philips shares traded up 5.5% at 0855 GMT, helped by fourth-quarter earnings which were much better than expected.
“There is a significant beat on Q4 and the operational improvement measures are very large,” ING analyst Marc Hesselink said in a note.
Jakobs took over the reins of the company last October, as Philips continued to grapple with the fallout from the recall of millions of ventilators used to treat sleep apnoea over worries that foam used in the machines could become toxic.
“What we present today I think is a very strong plan to secure the future of Philips. The challenges we have are serious and we are adressing them head on,” Jakobs told reporters.