Dutch electronics firm Philips has warned that it will cut between 3000 and 4000 jobs after posting huge losses this morning.
The company acknowledged that the downturn in the semiconductor, telecoms and PC industries "has accelerated in the second quarter, and has spread to all geographic areas".
Most of the cuts will be in the semiconductor division, although no details have as yet been confirmed. Some of the company's biggest plants are in the UK.
Philips reported a £470m second-quarter loss, compared with a profit of £2.2bn in the same period last year.
President and chief executive Gerard Kleisterlee said: "We remain very cautious about the economic development for the rest of the year, as visibility remains low. For semiconductors our current expectation is that the industry will not see a recovery before 2002."
He added that the industry downturn had significantly hit the semiconductor and components sectors.
The company has reduced capital expenditure plans for this year to £1.28bn, with the expectation that earnings will bottom out in the third quarter.
"We have taken firm measures in the first half of the year to reduce cost, hold inventories tight and cut capital spending," explained Kleisterlee. "In the second half of the year we expect to take additional pre-tax charges of between Eu250m and Eu300m to further reduce cost."
On this basis, he concluded, net income for the full year before special charges is now expected to come in at break even point or see a small loss.
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