Philips denies restructure talk

Ailing Dutch electronics giant Philips is shrugging off rumors that it is planning a major restructure of its consumer electronics operation in the face of continuing heavy losses.

Earlier this month, Philips reported losses of $ 88 million for its third quarter, the first time it has ever made a deficit.

The group’s president, Jan Timmer, said splitting up consumer electronics into two or three other divisions would be a “quick, easy way to getting money in the bank” but it would damage Philips’ damage long-term profits.

He added, however, that certain parts of the company would not be spared, and stressed the importance of “rigorous cost control.”

As part of Timmer’s ongoing “Operation Centurion” reorganization program, Philips has reached agreement with the unions to cut back wage costs in 1993 by 4% and trim its work force by 1,000 to 2,000. Timmer said these measures would save Philips $ 118 million over the year, bringing wage costs down to 1992 levels.

This, plus limits on pay bonuses and cuts in management salaries, will retain some 1,700 jobs that would otherwise have had to go, Timmer said.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Biz News from Variety