Philips Restructures Innovation Division, Cuts Jobs in Eindhoven
Eindhoven, Wednesday, 5 February 2025.
Philips announces changes to its innovation strategy, including cutting 90 jobs in Eindhoven, raising concerns about future company innovations.
Impact on Workforce and Operations
The restructuring affects approximately 300 employees across the Netherlands [1], with job cuts primarily concentrated in Eindhoven, Amsterdam, and Best [1]. While 90 positions will be eliminated, many affected employees will be reassigned to different roles, relocated, or placed under new management [1]. The employees, who were primarily involved in medical innovation for existing Philips products, were informed of these changes on Tuesday afternoon [1].
Strategic Shift Towards AI
Philips’s central innovation and strategy department will maintain operations but with a renewed focus on data and artificial intelligence [1]. This strategic pivot comes as Philips holds a significant 22.4% market share in global medical imaging equipment, generating €4.3 billion in revenue from this segment [2]. The company’s commitment to innovation remains substantial, with €1.7 billion allocated to research and development, of which €700 million is directed towards operations in the Netherlands [1].
Market Position and Recent Performance
Despite the restructuring, Philips maintains a strong market presence, particularly in healthcare technology. The company has demonstrated significant growth in digital health platforms, which saw a 17.3% increase in 2023, attracting investments of €672 million [2]. Additionally, Philips commands a 29.6% market share in respiratory care technologies, generating €1.1 billion in revenue in 2023 [2].
Industry Response and Future Outlook
Trade union De Unie has expressed concern about the reorganization, noting that the company, once a symbol of innovation and employment in the Netherlands, appears to be continuously downsizing [1]. This restructuring follows a previous reorganization two years ago that affected 750 positions [1]. The company’s recent strategic decisions also include the sale of its Emergency Care business to Bridgefield Capital [3], indicating a broader organizational transformation focused on core healthcare operations.