Philips cuts 6,000 jobs after sleep device recall

Embattled Dutch medical tech maker Philips said on Monday it will slash 6,000 more jobs worldwide in a bid to restore profitability after a massive recall of faulty sleep respirators.

The Amsterdam-based firm revealed the “difficult but necessary” job cuts as it announced losses of 1.6 billion euros ($1.7 billion) in 2022, largely on the back of the safety issue.

The fresh layoffs come just months after Philips announced the loss of another 4,000 posts, against a total workforce of just under 80,000 employees around the globe.

Philips is now facing investigations and lawsuits in the United States after it was forced to recall appliances to treat people with sleep problems that put people at risk of inhaling toxic foam.

Chief Executive Roy Jakobs, who took over in October, said Philips had no choice but to make the “difficult, but necessary further reduction of our workforce by around 6,000 roles globally by 2025.”

“2022 has been 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,” Jakobs said in a statement.

Half of the jobs will be cut in 2023.

Philips unveiled net losses of 105 million euros ($114 million) for the fourth quarter of 2022 and 1.6 billion euros for last year as a whole.

Starting off as a lighting company more than 130 years ago, Philips has undergone major changes in recent years, selling off assets to focus on making high-end electronic healthcare products, often for use remotely.

But that shift has been called into question by the giant recall that has pushed it into loss and seen the previous CEO Frans van Houten step down.

Philips announced the global recall in 2021 of its appliances to help people suffering from sleep apnoea, a disorder in which breathing stops and starts when people sleep.