Dutch medical device manufacturer Royal Philips NV yesterday said that it would cut 4,000 jobs as another massive penalty for faulty sleep respirators pushed it into loss.
The 1.3 billion euro (US$1.28 billion) charge for the defective machines pushed the firm into a net loss of the same amount, the company said in a statement.
Philips has been bedeviled by faulty devices that put users with sleep apnea at risk of inhaling toxic foam. The firm’s previous CEO stepped down earlier this year after leading the company’s transition from a consumer electronics to medical device manufacturer over the past 12 years.
Photo: Reuters
Philips had already set aside 900 million euros over the faulty respirators and had warned two weeks ago that it would take the 1.3 billion euro charge this quarter.
New chief executive Roy Jakobs said that his “immediate priority is ... to improve execution so that we can start rebuilding the trust of patients, consumers and customers, as well as shareholders and our other stakeholders.”
Jakobs said Philips would double down on patient safety and quality management, improve supply chain operations so that it can better fulfill orders and carry out a restructuring of operations to improve productivity.
“This includes the difficult but necessary decision to immediately reduce our workforce by around 4,000 roles globally,” Jakobs said.
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