Royal Philips Electronics announced on Monday it is cutting 6,000 jobs in the wake of its poor performance in the final quarter of 2008.
The Eindhoven-based electronics giant, which will be cutting jobs at all divisions, said it suffered a net loss of 1.5 billion euros (1.94 billion dollars) in the fourth quarter of last year, resulting in a net loss of 176 million euros for 2008.
Commenting on the presentation of the 2008 company results, board chairman Gerard Kleisterlee said the job cuts were necessary to save 400 million euros, starting in the second half of 2009.
In 2007, Philips posted a net profit of 4.16 billion euros, reported dpa.
In the fourth quarter, pre-tax earnings dropped from 871 to 141 million euros, partly caused by 390 million euros in reorganization expenses.
Turnover for the last quarter of 2008 amounted to 7.6 billion euros, compared with 8.7 billion euros the previous year.
The drop was mainly caused by the consumer market division; Philips' other divisions still posted a growth.
Turnover for 2008 dropped slightly from 26.8 to 26.4 billion euros
Despite the loss, Philips said it would give its shareholders 0.70 euros per share in dividend. An ongoing share purchase of 5 billion euros however was being stopped.
The company said it suffered substantially from the economic crisis in the final months of 2008.
"We are experiencing one of the worst economic fallbacks in recent history," Kleisterlee said. Philips expects the market to worsen in the first months of 2009.
The company said that under the current economic circumstances it was impossible to make any long-term predictions.
Kleisterlee added he is convinced Philips can cope with the economic fallback.