Philips announced a loss of €1.3bn in the second quarter on sales up 4%. “Our second-quarter results were impacted by near-term operational challenges, weaker markets and a significant impairment charge. We are taking necessary steps to improve performance and we are confident in the prospects of our portfolio.” said Frans van Houten, President and CEO of Royal Philips Electronics on Monday.

The company is now preparing for a drastic reorganisation to cut costs by €500m and revise its growth targets downwards. No details have yet been given of what the reorganisation will entail, but unions fear thousands of job losses are on the cards.