Philips to shed 6,000 jobs

Philips will cut the jobs over the coming year and halt its €5bn share-buyback programme, in response to the global economic recession

Electronics company Philips has said it is to shed 6,000 jobs over the coming year in response to the global economic recession.

The job cuts will take place across all geographic regions and will affect all areas of Philips's business, a company spokesperson told ZDNet UK on Monday. In addition, Philips will now completely halt its €5bn share-buyback programme, which it limited in the third quarter of last year.

In a statement, chief executive Gerard Kleisterlee said Philips's lighting businesses had suffered due to the downturn, as had its consumer business.

"Our fourth-quarter results are a reflection of both the severe impact of the global financial and economic crisis and the decisive actions taken by management," said Kleisterlee. "The effects of the steep downturn have led not only to value adjustments of our remaining financial holdings and the impairment of goodwill at Lumileds [a Philips business whose products are used in mobile-phone flashes and for LED back-lighting], but also to a sharp reduction in demand, especially in consumer lifestyle and in our [equipment manufacturer] businesses in lighting, compounded by de-stocking in the whole supply chain."

Philips end-of-year financial results came out on Monday, at the same time as its results for the fourth quarter of last year. Over that quarter, Philips's lighting business had experienced a three percent drop in sales, according to Philips chief financial officer Pierre-Jean Sivignon. The decline was due to a drop in demand for Lumileds products and for lighting products for the automotive industry, Sivignon said in a press-conference call.

"We're anticipating ongoing weakness in several of our end markets," said Sivignon.

Philips announced losses in net income of €1.5bn in its year-end results, which included restructuring and acquisition-related charges. According to Philips's spokesperson, the main cause of the loss was certain writedowns of shares, due to falling share prices at companies where Philips had invested heavily, including LG and NXP.