Philips Layoffs 2023: Company Fires 6000 Employees, Here’s Why

Philips layoffs 2023 is now doing the rounds on the Internet after the company announced its intent to let go of 6000 employees. This decision has been announced additionally, after the company announced that it was cutting 4,000 jobs in October 2022. Roy Jakobs, CEO of Royal Philips said that 2022 had been a very difficult year for Philips and its stakeholders, which is why they had to take firm actions to improve the company's execution and step up its performance with urgency.

Reason for Philips Layoffs 2023

The company suffered losses, and 70 percent of the market share of the company got reduced after it recalled some of its medical devices last year. In June 2021, Philips recalled some of its ventilators, BiPAP machines, and CPAP machines because of the potential health risks. “The polyester-based polyurethane (PE-PUR) foam used in these devices to reduce sound and vibration can break down. If this occurs, black pieces of foam, or certain chemicals that are not visible, could be breathed in or swallowed by the person using the device. These issues could potentially result in serious injury and require medical intervention to prevent permanent injury. The PE-PUR foam issue may result from exposure to hot and humid conditions and may be exacerbated by the use of ozone cleaners or other cleaning methods not recommended by the manufacturer,” says the FDA website.

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Some of the potential risks of particulate exposure if inhaling or swallowing pieces of PE-PUR foam include:

• Irritation to the skin, eyes, nose, and respiratory tract or airway.
• Inflammatory response.
• Headache.
• Asthma.
• Toxic or cancer-causing effects to organs, such as kidneys and liver.

In addition to this, Philips layoffs 2023 is also a result of the company suffering with supply-chain challenges, lower sales in China and the fallout from the Russia-Ukraine war.

“Our strategy will focus on organic growth through patient and people-centric innovation at scale, with a strong improvement in execution as key value driver. This will be enabled by strengthening our patient safety and quality management and completing the Respironics recall. We will also urgently enhance the supply chain reliability to improve performance and simplify our way of working to improve our agility and productivity. This includes the difficult, but necessary further reduction of our workforce by around 6,000 roles globally by 2025. I am confident that these comprehensive actions will put Philips on a progressive path to value creation with sustainable impact to achieve mid-single-digit comparable sales growth and a low-teens Adjusted EBITA margin by 2025, further expanding to a mid-to-high-teens margin beyond 2025,” said Roy Jakobs on the Philips layoffs 2023.