Philips Announces First Loss Since 2003, Plans 6,000 Job Cuts

Philips, Europe's biggest consumer electronics producer, is the latest to join the large number of companies that have recently announced quarterly losses and job cut plans, due to a global low economy. Specialized in consumer electronics, Philips has just announced losses of more than 1 billion Euros in the fourth quarter, marking its first quarterly loss since 2003. As a result of the low financial result, Philips is expected to cut approximately 6,000 jobs, in an attempt to revitalize its consumer business.

 

“The development of our quarterly results reflects the unprecedented speed and ferocity with which the economy softened in 2008.” said Gerard Kleisterle, chief executive officer at Philips.

 

The Dutch company posted a net loss of 1.5 billion Euros, or roughly $1.9 billion, representing its first loss since 2003. On the bright side, Philips saw its shares rise on Monday by more than 5 percent on account of keeping its dividend at last year's level of 0.7 Euros a share, according to analysts cited by Reuters.

 

Philips' report comes after a series of similar ones delivered by its competitors, including Sony and Samsung, both of which are major players in the consumer electronics market. While Samsung has already reported its quarter results, with the company recording its first ever quarterly loss, Sony has announced that it expects a record $2.9 billion annual operating loss, also planning to cut an impressive number of jobs, as well as closing some of its facilities.

 

As its competitors, Philips is planning to accelerate its restructuring plans, which will include approximately 6000 job cuts in 2009. The layoffs are expected to provide the company with 400 million Euros per year, in savings.

 

The giant manufacturer's shares were up 5.1 percent at 13.25 Euros, after rising as much as 10 percent earlier.