Philips restructuring: Massive layoffs and recall of sleep apnea devices

An expected restructuring involving a major round of layoffs will draw plenty of attention Monday when Dutch healthcare technology group Philips releases its 2022 results. According to the newspaper Eindhovens Dagblad, at least 1000 jobs will disappear in the Netherlands alone, as Philips made a loss of more than 1.5 billion euros last year. More jobs could be affected worldwide.

The plans to cut jobs come on top of a round of layoffs that CEO Roy Jakobs implemented in October 2022. Back then, 4000 jobs disappeared, including 400 in the Netherlands.

Furthermore, the status of the sleep apnea device recall is also under renewed scrutiny. Philips plans to complete that recall early this year, but even then there are unanswered questions about which the company may be able to shed more light on. For example, Philips is still in discussions with the U.S. Food and Drug Administration (FDA) and U.S. Justice Department about the conditions the company must meet before it is allowed to market sleep apnea devices again. The company also still faces a number of lawsuits that could lead to claims for damages.

Analysts believe the Dutch medical device company's sales were down from 2021, which also resulted in a loss. Aside from the sleep apnea device issues, Philips also continued to suffer from supply chain disruptions and high material and energy prices. However, Philips supporters believe the supply chain should stabilize later this year. Contributing factors include the reopening of China after years of Covid-19 restrictions.