Dutch Philips employees are resisting a major reorganization at their company. Thousands of jobs will disappear and hundreds of millions of euros for research will disappear or be given a different destination. Within the research and development department, employees are afraid that Philips is destroying its own global innovative power. That writes Het Financieele Dagblad.
The works council of that department approached the Enterprise Chamber on 7 April to block the reorganization. Philips confirms this in response to an internal memo, about which the FD asked questions.
The resistance is a new setback for the tech company, which will publish its first-quarter results on Monday. Philips was already under fire from regulators and shareholders, now there is also internal unrest. The company has been embroiled in hundreds of lawsuits and claims from shareholders and patients since Philips had to recall millions of medical ventilators in 2021 due to manufacturing defects.
Philips CEO: good straight staff
It is the right of the Philips staff to take the matter to court because of the planned reorganization at the medical technology company. That is what CEO Roy Jakobs said to the ANP.
Jakobs disputes that the staff wants to stop the entire reorganization. “Advice is being requested on a few aspects,” said the CEO, who expects it to be “a matter of weeks” before a solution is found.
“There is one works council of a division that has gone to court,” Jakobs emphasizes that there is no widespread resistance. “We are talking to a lot of works councils and we have already decided with a number of them.”
According to the CEO of Philips, some resistance is to be expected. “It is a radical change. We had a system that worked very well for a long time, but it no longer worked,” he explains his reason for the intervention.
‘Structural changes’
More than half of the total number of jobs to be cut has already disappeared, namely 5400 of the 10,000. “Last year we cut 3,000 jobs, this year there are 2,400 of the planned 4,000,” explains Jakobs. The remaining 3,000 jobs will only disappear in the coming years.
According to Jakobs, these are related to ‘structural changes’. As an example, he cites moving production from, say, China to India ‘to strengthen our supply chains’.
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