Philips, the Dutch electronics conglomerate best known for its light bulbs, announced earlier today that it plans to split into two companies — one focused on consumer and medical technology, and one focused exclusively on lighting. Both companies would continue to operate under the Philips brand, but the plan is to eventually split the lighting division off into its own company.
This is the latest in a long series of restructuring efforts that the company has implemented over the past couple decades in an attempt to fix its cumbersome corporate structure and boost profitability. Prior to this announcement, Philips was organized into three main divisions: Philips Consumer Lifestyle (formerly Philips Consumer Electronics and Philips Domestic Appliances and Personal Care), Philips Healthcare (formerly Philips Medical Systems), and Philips Lighting. The restructuring effort will essentially serve to merge the Consumer Lifestyle and Healthcare divisions into one entity.
In the company’s own words, this will allow Philips to, “capitalize on the convergence of professional health care and consumer end-markets across the health continuum, from healthy living and prevention, to diagnosis, treatment, recovery and home care. This is illustrated by the rising engagement of consumers to proactively monitor and manage their health, and by increasing pressures on the healthcare system to create new models of care along the health continuum to deliver better and affordable care.”
Philips said the overhaul will generate a total of €300 million in cost-savings in 2015 and 2016, but it could also result in job losses. The company expects to provide more information on the changes in 2015.