Philips to cut 6 000 jobs

Amsterdam - Royal Philips Electronics announced on Monday it is cutting 6 000 jobs in the wake of its poor performance in the final quarter of 2008.

The Eindhoven-based electronics giant, which will be cutting jobs at all divisions, said it suffered a net loss of €1.5bn in the fourth quarter of last year, resulting in a net loss of €176m for 2008.

Commenting on the presentation of the 2008 company results, board chairman Gerard Kleisterlee said the job cuts were necessary to save €400m, starting in the second half of 2009.

In 2007, Philips posted a net profit of €4.16bn.

In the fourth quarter, pre-tax earnings dropped from €871m to €141m, partly caused by €390m in reorganisation expenses.

Turnover for the last quarter of 2008 amounted to €7.6bn, compared with €8.7bn the previous year.

The drop was mainly caused by the consumer market division; Philips' other divisions still posted a growth.

Turnover for 2008 dropped slightly from €26.8bn to €26.bn.

Despite the loss, Philips said it would give its shareholders €0.70 per share in dividend. An ongoing share purchase of €5bn however was being stopped.

The company said it suffered substantially from the economic crisis in the final months of 2008.

"We are experiencing one of the worst economic fallbacks in recent history," Kleisterlee said. Philips expects the market to worsen in the first months of 2009.

The company said that under the current economic circumstances it was impossible to make any long-term predictions.

Kleisterlee added he is convinced Philips can cope with the economic fallback.

- Sapa