Royal Philips Electronics will dissolve its components division and align disparate related activities across various business units at a cost of approximately A$315.5 million.
As a result, the company will close its component division headquarters in California, with activities expected to cease from the start of next year, according to Philips executive VP Arthur van der Poel.
“Our customers remain our highest priority and we will work directly with them over the coming period to assure the quality and supply of our products,” van der Poel said.
“We will also work with all affected employees to make the transition as smooth as possible.”
“Given the current market conditions, we are accelerating the process to heighten the cooperation between the businesses in our electronics cluster and focus on higher growth activities that will deliver significant cost savings,” van der Poel said.
Options for a comprehensive restructuring of the Optical Storage division will be announced in the coming eight weeks, with the focus expected to shift towards growing the adoption of the DVD+RW standard.
Among the various alignment plans, Philip’s telecom speaker activity will be combined with Mobile Display Systems (MDS) and moved to Philips Semiconductors, offering customers a single source for complete and integrated solutions for the telecom and PDA markets.
In the same way, certain digital display and wireless connectivity activities, including the Pronto remote controls group, will move to Philips Consumer Electronics – again to reduce organisational complexity and duplication, and maximise synergies both for branded and OEM solutions.
A new stand-alone business initiative group will also be formed in order to give more focus and attention to new high-growth display opportunities, including Liquid Crystal on Silicon (LCoS) technology.