Merrimack Valley

Philips Healthcare hit with layoffs as state reels from unemployment

By Bill Kirk
bkirk@eagletribune.com
Published: November 21, 2008

ANDOVER — Philips Healthcare, headquartered on Minuteman Road, is laying off about 100 people locally as part of a global restructuring that will result in the loss of about 1,600 jobs.

"This is a reorganization of our health care division," said Philips spokesman Ian Race. "We need to reduce the number of layers in the organization so we can make faster decisions and be more responsive to our customers."

The layoffs were announced to employees earlier this week, Race said, and hit every department across the health care division of Royal Philips Electronics, a Dutch company.

News of layoffs at Philips come on the heels of 60 layoffs announced this week at Bosco, a lumber supply company in Andover, as well as about 50 layoffs announced at Putnam Investments late last week. Putnam has a significant Andover facility.

It also comes as Massachusetts announced yesterday that the state's unemployment rose from 5.3 percent to 5.5 percent in October, still below the national rate of 6.5 percent. According to the Executive Office of Labor and Workforce Development, Massachusetts lost 9,000 jobs in October, led by declines in construction and retail jobs.

Nationally, the unemployment rate rose to 6.5 percent in October, with about 10.1 million people reportedly out of work.

Yesterday, the news got even worse, as 542,000 more people filed for unemployment nationally.

The job losses are being attributed primarily to what financial experts are saying is a global recession.

But Race, of Philips, said the layoffs at the health care division are only partly related to the economy.

"They are not necessarily linked to the global recession, although it doesn't help from a market standpoint," he said. "In terms of the health care market, the economy is impacting everybody. This is more about needing to take action with the reorganization, removing those layers, so decisions can be made faster.

"Unfortunately, this means we have to make an adjustment to our work force, to make that happen," he added. "It's a difficult action at a difficult time."

Philips Healthcare, formerly known as Philips Medical Systems, is a division of Royal Philips Electronics, a multinational corporation based in Amsterdam. Other divisions of the company include consumer products, electronics and lighting.

Andover is the global headquarters of the medical systems division, with about 2,500 employees locally, Race said.

The company employs 32,000 around the globe, with layoffs affecting about 5 percent of that number. There are some 15,000 Healthcare employees in the United States, including about 3,000 employed in Massachusetts.

In Andover, the layoffs will affect every department, from manufacturing and assembly to administrative positions, Race said.

"It's worth noting we've done everything we can to treat employees fairly," he said, including offering severance packages, appropriate assistance and support.