Philips cuts jobs, CD-RW production in Belgium plant - Printer Friendly version without Comments

Appeared on: Thursday, October 11, 2001
Philips cuts jobs, CD-RW production in Belgium plant

Philips Electronics NV plans to lay off a total of 441 employees from its production facilities in Hasselt, Belgium and scale back its production of CD-RW (compact disc-rewritable) drives, a company spokesman confirmed Thursday. "There are about 276 contracts for Philips blue- and white-collar workers that will be terminated and 165 temporary contract workers that will also be let go," said Philips spokesman Michels Guillen.

According to Guillen, the layoffs are part of the 4,000 layoffs company-wide that were announced in April due to steep decreases in sales. The Philips plant in Hasselt produces CD-RW drives and set-top boxes, but the plant will cut back on its production of CD-RW drives to focus on such upcoming technologies as its DVD+RW (digital versatile disc-rewritable) drives. "With CD-RW drives there is a more general problem of decreasing demand on the world market. There are too many CD-RW drives on the market and as a result, there will be a turnover of several brands," Guillen said."We already producing DVD+RW drives (in the Hasselt plant) which have far more potential," Guillen said.

DVD+RW is a standard for recording data and video on DVDs (digital versatile discs) that is also being promoted by Sony Corp. and Ricoh Co. Ltd. The DVD+RW device allows for 12-speed recording of data and 2.5-speed DVD writing and is scheduled for launch later in the month with a price tag of about US$1,000. Philips now hopes to use its Hasselt, Belgium plant as a sort of trial and error development area, where new products and production methods are tested out and, once perfected and approved by the company, moved on to plants that can produce products more cheaply, Guillen said.

"We are going on with the policy that we develop new products and processes in Hasselt, experimenting with production and then shifting the production to other low-cost environments such as Hungary and China," Guillen said. For those types of shorter-term projects, Philips plans to hire 140 new employees on temporary contracts. "We are hiring the people from special agencies. The length of the contracts will depend on the products and processes that are in development," Guillen said. "Our focus for next year will be on set-top boxes for the Internet and on drives for optical storage. This is the challenge," Guillen said.