Philips to shed 4,500 employees
That is about 3.7% of its non-TV workforce of just over 120,000, which had already been reduced by a 2009 programme to cut 6,000 jobs.
“The global TV market has deteriorated, and obviously the sooner we complete this the better, but we first need to finalise the negotiations, and whether we can do that this year or into the first quarter of 2012, there are some uncertainties with that planning,” said chief executive Frans van Houten.
Philips — the world’s biggest lighting maker, a top three hospital equipment maker and Europe’s biggest consumer electronics producer — said negotiations to sell off most of its TV business to Hong-Kong based monitor-maker TPV were intense, 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.
Van Houten told reporters the companies were still talking but if negotiations were finalised, it could then take months to close a deal due to regulatory hurdles.
Van Houten also said it was too early to outline a backup plan for the TV business, which makes up less than 10 percent of group sales and has gone from being a global leader to a drag on the Dutch company.
The unit has notched up almost €1 billion in losses since the beginning of 2007, when competition with lower cost Asian rivals began to intensify.
Yesterday Philips reported falling third-quarter profit due to higher restructuring and raw material costs and sluggish European growth and said it would focus on operational and overhead cuts as part of its €800m cost-saving plan.
Despite reiterating the firm’s 2013 financial targets of 4-6% sales growth, and a margin on earnings before interest, tax and amortization (EBITA) of 10-12%, Van Houten said Philips had a long way to go.
“We are not yet satisfied with our current financial performance, given the ongoing challenges,” he said.
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