Dutch consumer electronics group Philips has announced that it will be slashing 4,500 jobs as profits continue to fall.
Philips currently employs 116,000 people around the globe including 2,200 in the UK.
Philips is Europe’s largest consumer electronics firm however it has struggled in 2011 reporting an 85% decline in third quarter net profit to €74m, from €524m a year earlier.
Frans van Houten, chief executive of Philips, commented: “We are not yet satisfied with our current financial performance given the ongoing economic challenges, especially in Europe, and operational issues and risks. We do not expect to realise a material performance improvement in the near term.”
Philips hopes that the 4,500 jobs being shed will contribute as much as 60% of a Eu800m (£698m) savings scheme.
The objective, according to Mr van Houten, is to become leaner and more agile. According to a Philips spokesperson the strategic focus of the cuts is to reduce complexity in support functions and administration – inferring that manufacturing jobs are not directly at risk.
It is not yet clear how many jobs will be lost in the UK. 1,400 will be cut in the firm’s home nation, the Netherlands, and the strategy for the remaining 3,100 is expected to be announced shortly.
Despite Philips’ attempts to innovate and engage better with customers and consumers through its online collaborative innovation tools a recent report from the European Commission highlights sluggish innovation in EU companies in comparison to Asian and US rivals.