Philips to cut 4,500 jobs as profits slump

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The Independent Online

Lightbulbs-to-TV maker Philips is to cut 4,500 jobs after announcing its profits nearly halved during the summer.

Philips, which employs 116,000 staff globally, including several thousand in the UK, is looking to save 800 million euro (£701.4 million).

It has not yet spelled out where the job cuts will fall, apart from saying that 1,400 staff will go in the Netherlands, where the company is based.

Underlying profits fell 76% to €368 million (£322.7 million) in the third quarter of 2011, while revenues were down 1% to €5.4 billion (£4.7 billion) as the company continues to suffer as consumers rein in spending on goods such as lighting, shavers and blenders.

Chief executive Frans van Houten said the job losses were "a regrettable but inevitable step to improve our operating model to become more agile, lean and competitive".

Philips employs 2,200 staff in the UK at Guildford, Surrey, a lighting factory at Hamilton, South Lanarkshire and a plant in Chichester, West Sussex, where it makes respiratory equipment.

The world's biggest manufacturer of lightbulbs said sales of lighting and consumer lifestyle products were down 1%. However, it was pleased by demand for its energy efficient LED lighting.

Sales of products through its healthcare division, which makes items such as cardiac equipment used in hospitals, were flat but would have been up 7% without the impact of currency fluctuations.

Mr van Houten, who took over in April, added that negotiations to sell its loss-making TV joint-venture to China's TPV were "taking longer than expected". It is also considering alternative options in case an agreement is not reached.

Sales to emerging markets failed to compensate for the poor performance of western Europe where sales were down 5%.