Signify to cut jobs in revamp to save 200 million euros annually
Reuters
Published Dec 01, 2023 07:33AM ET
By Diana Mandia
(Reuters) - Signify is to cut jobs as part of a restructuring that is targeting annual savings of 200 million euros ($218 million), sending shares in the world's biggest light maker up as much as 6.6%.
Signify, spun off from Dutch technology group Philips in 2016, has already been cutting costs, including through layoffs, in response to a sluggish recovery in key market China and lower sales volumes.
"We will further adjust the size of our central organisation and reduce our costs to support the company's performance," CEO Eric Rondolat said in a statement.
A company spokesperson told Reuters the plan would involve "some job losses", without providing further details.
As part of the restructuring there will be four vertical businesses which will aim to enhance speed of execution and focus on customers, the group said.
The maker of LED lighting systems and electrical components said three of the new units would focus on customers, while the fourth would be dedicated to conventional lighting technologies.
Signify's shares rose 5.6% to 28.16 euros at 1110 GMT on Friday, among top performers on Europe's benchmark STOXX 600 index.
Signify did not disclose how many people would be affected by the revamp, but reiterated its aim to keep non-manufacturing costs within 25%-29% of sales.
In the third quarter, its adjusted indirect costs as a percentage of sales increased by 160 basis points to 30.2%.
Rondolat had said in October that the group was doing whatever it could to return the costs to a targeted range.
J.P. Morgan said the magnitude of the cost saving plan was higher and came in earlier than the brokerage had expected.
"The new segment structure will also improve the disclosure and bring Signify closer to the customers, " it added.
The changes will be implemented through 2024, with most of them set to be completed by the second quarter.
Signify's nominal sales fell by 13.8% in the third quarter hit by slow demand across its geographies, it said in October.
($1 = 0.9179 euros)
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