Philips cuts more jobs, TV division sale delayed

Now Reading:

Philips cuts more jobs, TV division sale delayed

Text size Aa Aa

As it announced falling third-quarter profit and 4,500 more job cuts, Philips Electronics appears to have all but abandoned hope of selling its loss making TV business by the end of the year.

The Dutch company’s chief executive said the focus now is on cutting overheads as part of its 800 million euro cost saving plan.

Frans van Houten told reporters: “I don’t like to announce job cuts but it is necessary to make Philips a more agile and lean, entrepreneurial company. We want to invest in innovation and further market penetration that will help Philips grow in a profitable manner.”

Its third-quarter net profit dropped to 76 million euros due to higher restructuring and raw material costs and sluggish sales in Europe.

Profit has been rebuilding since the 2008 recession and reached 524 million euros in the third quarter last year.

Philips said negotiations to sell most of its TV business to Hong Kong based monitor-maker TPV are intense and constructive and taking longer than expected.

“For the eventuality that a final agreement cannot be reached, Philips will consider its alternative options,” van Houten said.

The 4,500 job cuts are about 3.7 percent of its non-TV workforce of just over 120,000. They come on top of 6,000 in a 2009 cost reduction programme intended to boost profit and meet Philips’ financial targets.

Philips is the world’s biggest lighting maker, a top three hospital equipment maker, and Europe’s largest consumer electronics producer.