The Eindhoven lighting company Signify will cut a thousand jobs, almost half of which will be in the Netherlands. CEO Eric Rondolat said this in an explanation of the annual and quarterly figures. Philips’ former lighting division is struggling with ‘challenging market conditions’.
The job losses are part of a previously announced reorganization that should result in savings of two hundred million euros. Last year, 2,700 jobs disappeared at the company.
At the end of last year, Signify had almost 32,000 employees worldwide, approximately two thousand of whom 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.”
According to Rondolat, Signify is mainly struggling 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 have to 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 gets its own profit and loss account.
Signify’s turnover fell by almost 11 percent last year to 6.7 billion euros. Rondolat expects the challenging conditions to continue this year, but says he 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 of 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 cutting costs 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?’
Fuss about social plan and collective labor 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 the creation of both the social plan and a new collective labor agreement. “I have the feeling that the employer does not recognize us in our role.”
The post first appeared on studio040.nl