Philips CEO Leaves. Why’s That?

Philips recently announced a significant leadership change. Roy Jakobs, head of the company’s Connected Care businesses, should replace CEO Van Houten on October 15. This transition precedes Van Houten’s anticipated third term, initially scheduled for April. A special shareholder meeting planned for September 30 aims to formally appoint Jakobs, a Philips veteran since 2010, as CEO.

Philips shares experienced a 2.2% rise in early Amsterdam trading. However, the stock has seen a decline of more than 50% since June 2021. This decrease came in the wake of an unforeseen recall of 5.5 million ventilators prescribed for sleep apnoea treatment. The recall was due to issues with a specific foam in these devices. This foam, used for noise reduction, was found to deteriorate and potentially emit dangerous particles and gases.

Philips’ Strategic Transformation and Leadership Evolution

The recall dealt a significant blow to Philips’ reputation and stirred speculations of an external candidate for the CEO role. Despite these challenges, Feike Sijbesma, the chairman of the supervisory board, has expressed confidence in Jakobs’ capability to lead the company through these turbulent times. Van Houten, 62, has been pivotal in transforming the company from a sprawling conglomerate into a streamlined healthcare technology firm over his nearly twelve-year tenure, spinning off the lighting and consumer electronics sectors.

Philips now focuses on medical imaging, monitoring, and diagnostic equipment, thereby establishing itself as a formidable competitor to industry giants such as General Electric (NYSE: GE) and Siemens Healthineers. This strategic shift has positioned Philips as a leader in healthcare technology, poised for future growth and innovation in a rapidly evolving industry.