Dutch-based international medical device company Philips has announced a 5% cut in its global workforce of 78,000. Philips is the largest medical device employer in Israel with 1,500 employees but "Globes" understands that the layoffs in Israel will be much smaller than 5%, with only several dozen jobs lost.
The layoffs at Philips come after its share price has fallen 57% since the start of 2022. The company has been harmed by the overall crisis, which has hit the healthcare sector especially hard. But Philips has also suffered its own unique problems including the recall of its Respironics ventilators issued by the US FDA.
Royal Philips CEO Roy Jakobs said in the quarterly report, "We face multiple challenges and our Q3 2022 performance reflects this. Although Philips' strategy and solutions resonate with our stakeholders, we have not lived up to their expectations in recent years."
He added that measures to rebuild the trust of patients, customers and shareholders include, "the difficult, but necessary decision to immediately reduce our workforce by around 4,000 roles globally, which we do not take lightly and will implement with respect towards impacted colleagues. These initial actions are needed to start turning the company around in order to realize Philips' profitable growth potential and create value for all our stakeholders."
Philips has undergone a major transformation in recent years by shedding its consumer electronics and domestic appliances activities and focusing solely on healthcare and medical devices.
Philips has extensive healthcare operations in Israel. In addition to its development center in Haifa, which specializes in imaging and processing medical data, Philips is a partner with Teva in the Sanara Ventures incubator for digital health. In 2018, Philips acquired Israeli EPD cardiac imaging and navigation solution developer for $300 million while back in 2010 Philips acquired the CDP medical archiving company for $12 million. Philips also owns Israeli medical imaging company Algotec.
Published by Globes, Israel business news - en.globes.co.il - on November 17, 2022.
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