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Philips To Cut 30% Of Atlanta Workers

Atlanta – Philips Consumer Electronics, North America notified employees here last week that it is looking to reduce its 375-person work force by 30 percent under ‘a voluntary separation program,’ a Philips spokesperson confirmed.

Philips said the staff reductions at the Atlanta headquarters are being sought as part of the consumer electronics division’s ‘global business renewal process,’ which is seeking to ‘reduce duplication between divisions, business units and regions.’

‘The strategic decision to reduce the workforce will enable Philips Consumer Electronics to remain competitive in the marketplace,’ the company said.

The offer is being made across all levels and positions in the Atlanta offices, and it is anticipated the voluntary reduction process will be completed by year’s end, the spokesperson said. If the approximately 110 volunteers do not come forward, Philips will look at other courses of action at that time, she said.

Employees are being given special ‘incentives’ to leave voluntarily, the company said. Included in the package are outplacement services, severance and unused vacation day payments, along with ‘a generous, but temporary continuation of a comprehensive benefits package. In addition, employees will be offered an opportunity to interview with other Philips Electronics product divisions in order to explore other employment options within the organization.’

In announcing its recent third quarter financial statement, Dutch parent Royal Philips Electronics reported it had substantially reduced its third-quarter consumer electronics loss in North America, compared with second quarter results. The CE segment reported an overall loss from operations in the third quarter at negative $37.5 million, compared with a $9.4 million operating profit for the same three months in 2002.

Philips said it had moved into the black in the third quarter, reporting consolidated net income of $145.1 million compared with a loss of $386.3 million in the same three months a year ago. Royal Philips Electronics reported a worldwide operating loss of $147.5 million in the third quarter, compared with operating income of $158 million year over year. The company said it was in the process of streamlining its CE business, and aimed to reduce annual CE operating costs by $468 million by the end of 2005.

In announcing the ‘global business renewal process’ recently, Royal Philips Electronics said ‘it is inevitable that there will be consequences for headcount, but details need to be worked out per unit and geography by the newly appointed leadership team. It is too early to say anything about how many, where and when, but we will have a total overview before the end of the year.’