Monday, January 26, 2009
Royal Philips Electronics NV is to reduce its workforce by 6,000 worldwide this year after reporting its first quarterly loss for almost six years. It also halted an ongoing shares buy-back program.
The company suffered a net loss of Euros 186 million for 2008 after a fourth quarter loss of Euros 1.47 billion, partly because of a write-down in the value of its Lumileds diode light unit, as well as downgrading the value of its remaining stakes in NXP Semiconductors and LG Display Co.
In 2007, the company reported a net profit of Euros 4.16 billion.
Sales for the year were Euros 26.4 billon, down 1.5 percent, but fourth-quarter sales fell 8.9 percent to Euros 7.62 billion.
Gerard Kleisterlee, the president and chief executive, said that the fourth-quarter losses reflected "the unprecedented speed and ferocity with which the economy softened in 2008". He added that, in response to a sharp reduction in demand, especially in its consumer lifestyle and lighting businesses, management was giving "absolute priority to cash flow, where necessary at the expense of operating profits".
Kleisterlee announced that in addition to the 3,000 job reductions made in the fourth quarter, a further 6,000 would be cut during the current year, adding this would cost about Euros 400 million.
The Euros 232 million impairment charge against the goodwill of Lumileds came because of softening of demand for LEDs in segments ranging from the automotive, display and mobile phone markets.
By: DocMemory
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