Reuters | | | Posted by Ritu Maria Johnny
Dutch health technology company Philips said Monday it will eliminate 6,000 jobs to restore profitability after a recall of respiratory equipment that has lost 70% of its market value.
Half of the job cuts will take place this year and the other half by 2025, the company said.
The new restructuring follows a plan to cut the workforce by 5%, or 4,000 jobs, announced last October, as well as a recall of millions of ventilators used to treat sleep apnea. Concerned about the foam used in the machine, to deal with the negative effects. It can be toxic.
Workforce reductions will drive margins (Adjusted EBITA) into the low teens by 2025 and into the mid-to-high teens thereafter, with comparable mid-single-digit overall sales growth Expected.
“Phillips faces a number of significant business challenges that are preventing it from fully leveraging the potential of its strong market position,” said Roy Jacobs, the company’s new CEO.
A simplified organization should also improve patient safety and quality and supply chain reliability, he added.
Amsterdam-based Philips also reported fourth-quarter adjusted earnings before interest, taxes, amortization (EBITA) of €651 million ($707.18 million), almost down from €647 million a year ago. Stable.
On average, analysts in polls compiled by the company expected core earnings to fall to €428 million.
