Philips is to cut 4,500 jobs as it reported a sharp fall in third-quarter profits as a result of lower margins, falling sales and a loss at its TV division.
Its group-wide net profit for the three months to 30 September was 74m euros ($103m; £65m), compared with 524m euros a year earlier.
Philips has issued two profit warnings in the past seven months.
Philips chief executive Frans van Houten said: “We are focused on improving the performance of Philips, driven by our change program Accelerate! We see the first signs of traction to accelerate growth through step-ups of investments in innovation and to win customers. We are still in the early stages of a multi-year overhaul to become a more entrepreneurial and lean company, but we are encouraged by the response of our employees.
"Our cost reduction plan of EUR 800 million has now been detailed, and we are in the process of deploying it across the organization as we optimize all overhead and support costs not directly involved in the operational customer value chain. The cost savings program will lead to the loss of approximately 4,500 jobs, which is a regrettable but inevitable step to improve our operating model to become more agile, lean and competitive."