The Eindhoven lighting company Signify will cut a thousand jobs, almost half of which will be in the Netherlands. CEO Eric Rondolat announced in a recent annual and quarterly figures presentation. Philips’ former lighting division is struggling with ‘challenging market conditions’.
The job losses are part of a previously announced reorganisation that should result in savings of two hundred million euros. Last year, 2,700 jobs disappeared at the company.
‘Cutbacks inevitable’
At the end of last year, Signify had almost 32,000 employees worldwide, approximately two thousand of whom were in the Netherlands. The production locations are mainly located abroad, although there is also one in Maarheeze in Brabant. In the Netherlands there are mainly office staff and the lamp manufacturer has a distribution center near Eindhoven Airport.
The company cannot yet say how many forced redundancies will occur in the Netherlands – in addition to the disappearance of jobs due to natural attrition.
According to CEO Rondolat, the cuts are unavoidable. “If you look at our costs as a percentage of turnover, we will be at 31 percent at the end of 2023. That is far too high.”
Houthi rebels
According to Rondolat, Signify mainly struggles with disappointing results in China, the company’s second-largest market. The company is also affected by rising tensions in the Middle East, where cargo ships in the Red Sea are being attacked by Houthi rebels. “We are seeing an increase in delivery times to twelve days because ships must follow a different route due to the conflict. And the container price has risen.”
Signify will be split into four divisions this year to improve customer focus. Each division will become financially independent and report its own profit and loss account.
Philips Lighting
Signify’s turnover fell almost 11 percent last year to 6.7 billion euros. Rondolat expects the challenging conditions to continue this year but is confident in the chosen strategy. “Over the past quarter, we introduced a new business model and measures that will improve our performance.”
Signify previously operated under the name Philips Lighting. The company went public in 2016, after which the company name was changed to Signify.
Bad business or bad management?
Trade union CNV Vakmensen is shocked by the large number of employees that Signify plans to dismiss in the Netherlands. Moreover, CNV negotiator Arthur Bot doubts whether this mass dismissal will work. “Signify has been cutting back and making cuts for some time now. Apparently that hasn’t helped. Why would this immense round of layoffs offer any relief?”
The CNV director wonders where exactly the problem lies. ‘We still have to look into the figures,’ he says, ‘but is this bad business or bad management?’
The fuss about social plans and collective labour agreement
The announced dismissal comes on top of the hassle that the unions and Signify have been having with each other for some time about creating the social plan and a new collective labour agreement. “I feel that the employer does not recognise us in our role.”
Source: Studio040
For Eindhoven News : Beena Arunraj
