Philips (PHG) Plans More Cost-Cutting Measures, Sees Headcount Reduction at 6,700
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Shares of Koninklijke Philips Electronics NV (NYSE: PHG) are trending higher early amid reports that the Company is planning to implement cost-cutting measures, which may include even more job cuts.
On Tuesday, CEO Frans van Houten said Philips is aiming to cut as many as 6,700 jobs by the end of 2014. The Company originally announced its intent to trim its workforce by 4,500 last October, with van Houten announcement today adding plans for another 2,200 cuts.
Overall, Philips plans to save about €1.1 billion, from an original goal of €800 million. The switch comes as overhead costs last year were about €5 billion on just €22.6 billion in revs.
In addition to cost savings, the cuts will reduce complexity in the structure, particularly IT, as well as duplication of positions. Reuters cited one analyst who said Philips currently has about 70 IT platforms and van Houten is aiming to lop that down to just six.
Philips sees meeting previous guidance calling for 4 percent to 6 percent of revs growth through FY13. Shares are up about 0.6 percent.
On Tuesday, CEO Frans van Houten said Philips is aiming to cut as many as 6,700 jobs by the end of 2014. The Company originally announced its intent to trim its workforce by 4,500 last October, with van Houten announcement today adding plans for another 2,200 cuts.
Overall, Philips plans to save about €1.1 billion, from an original goal of €800 million. The switch comes as overhead costs last year were about €5 billion on just €22.6 billion in revs.
In addition to cost savings, the cuts will reduce complexity in the structure, particularly IT, as well as duplication of positions. Reuters cited one analyst who said Philips currently has about 70 IT platforms and van Houten is aiming to lop that down to just six.
Philips sees meeting previous guidance calling for 4 percent to 6 percent of revs growth through FY13. Shares are up about 0.6 percent.
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