Royal Philips NV, commonly known as Philips, has announced that it will slash 4,000 jobs days after it installed new CEO Roy Jakobs.
This amounts to around 5% of the electronics company’s workforce, bringing its severance and other job cuts costs to around $295 million.
Jakobs says by making this move, he hopes to improve patient safety, “our supply chain operations” and alleviate the burden of inflation.
In 2020, Jakobs joined Philips’ Connected Care business as it dealt with the recall of sleep apnea devices, which were connected to increased cancer risks, during the early days of the pandemic. The fallout came in the form of a 60% drop in shares.
Despite the need for medical devices growing, Philips’ oversight led to a net loss of around $1.3 billion.
By conducting layoffs, the company appears to be taking a few steps back to mitigate its losses, revisit its quality missteps and address supply chain issues.