Philips to Cut 4,500 Jobs Globally as Q3 Net Profit Falls

October 17 00:00 2011

New York, October 17 ( – Higher restructuring and material costs have resulted in an 85 percent plunge in Q3 net profit of Philips Electronics – the world’s biggest lighting maker, Europe’s biggest consumer electronics producer and a top three hospital equipment maker.

Philips announced that it will cut 4,500 jobs globally as part of an 880 million euro cost-cutting scheme to boost profits and meet its financial targets and that it is considering alternative options for its TV unit.
The Amsterdam-based company said that it was in negotiations with Hong-Kong based TVP to sell off most of its TV business but it was taking longer than expected. Frans van Houten, chief executive said in a statement that “For the eventuality that a final agreement cannot be reached, Philips will consider its alternative options.”

Houten added that “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 realize a material performance improvement in the near term.”

Philips reported Monday that its third quarter net profit had come down to €76 million from €524 million a year ago and sales were down to €5.394 billion from €5.46 billion. Analysts had expected third-quarter net profit of €53.8 million on sales of €5.341 billion.