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PHILIPS TO CUT 6.000 JOBS AS SLOWDOWN BITES

This article was published in Times (Online) on 26 January, 2009.
It reports on Philips company which plans to cut 6.000 jobs through the world in order to make a corporate restructuring.
After describing the facts, let’s analyse the reasons.

First of all, the multinational firm Philips which makes electronics products, has a vocation for business to business in hospitals and stores. After a current reporting, the Chairman and Managing Director, Gérard Kleisterlee reveals a revamp. Indeed, the company suffered a net loss of € 1.47 billion for 2008. In fact, Lumileds diode light units represents a part of Philips losses in spite of a net profit of € 4.16 billion last year in 2007. Moreover, the sales of semiconductor have decreased too and will be more and more important in the future. Hence, the others losses concern televisions, video, multimedia, the automotive, the mobile phone market and the steelmaker. Finally, in answer to the declines, Philips decides to axe 9.000 jobs in total.
So, we can analyse the reasons why the firm plans today a reorganization.

Above all, the losses are the results of the current crisis which starts in 2007 in the United States, so, the behavior of the consumers changed, therefore, there is a drop with 13 % for televisions, 37 % for video and 34 % for multimedia.
In the same way, the Lumileds diode light units hadn’t expected success, then, the steelmaker has falled because of the British operations of Corus.
Besides, instead of using the working class, Philips operates the automotive in order to reduce running costs to be competitive.

To conclude, this article shows how severals multinational companies like Philips have suffered losses because of the slump and the fall in demand on behalf of the costumers. Their only one solution is the fact to axe jobs.
As far as I am concerned, such an action has negative