Philips: The Dutch corporation Royal Philips NV will cut 4,000 positions as it attempts to lower operating costs while dealing with a pricey recall of its sleep apnea treatment equipment.
According to Philips, the expenditures associated with severance and termination are anticipated to total around €300 million ($295 million) in the upcoming quarters. Frans van Houten, who had served in that capacity for 12 years, was replaced as CEO this month by Roy Jakobs, who is responsible for the restructure.
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Philips’ top objective to rebuild trust
“Improvement of execution is Philips’ top objective in order to begin regaining the trust of patients, consumers, and customers “Declared Jakobs in a statement. These actions include “urgently improving our supply chain operations” as well as “strengthening patient safety and quality management.”
Early in 2020, Jakobs was given the task of reviving the company’s Connected Care operations, handling the response to the Covid-19 crisis and the escalating problems with the recall of sleep apnea treatment devices. Shares of the massive healthcare company have fallen 60% so far this year.
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Philips is still dealing with legal issues.
The business is still dealing with legal battles regarding ventilator noise-dampening foam that is prone to deteriorating and purportedly poses a cancer risk when inhaled. In June of last year, Philips began its initial recall of the products and set aside a total of almost €885 million.
Additionally, Philips has taken an impairment charge for its sleep and respiratory care business of €1.3 billion.
A planned settlement with US authorities over the sleep apnea devices had its estimations changed, which is one of the causes reflected in the write-down.
In contrast to a profit of €2.97 billion in the same time a year prior, the corporation posted a net loss of €1.33 billion for the third quarter. A medical device manufacturer lowered its outlook earlier this month due to worse-than-anticipated supply-chain difficulties that are hurting deliveries and client installations.
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