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Philips Hue reorganizes, plans job cuts to save $218 million annually

Philips Hue reorganizes, plans job cuts to save $218 million annually

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The smart lighting brand’s parent company, Signify, says it will remain focused on customer-centric products.

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A Philips Hue Bridge on a white table with a power cord and ethernet cable connected to it.
Signify, the company which owns Philips Hue, is restructuring its business to focus on four key areas.
Photo by Jennifer Pattison Tuohy / The Verge

Signify, the company that owns smart lighting brands Philips Hue and WiZ, is restructuring in the face “of ongoing market volatility and uncertainty.”

In a press release on its website published earlier this month, Signify announced a “new customer-centric organization and structural cost reductions.” This appears to signal that the company is focusing more effort on products that consumers and businesses can buy and less on making products for other manufacturers and specialty lighting applications like projectors and lamp electronics.

“After the major transformation we achieved through the past decade, we are taking the next step by organizing our company around four vertically integrated businesses. Three of these will focus on customers: Professional, OEM, and Consumer. The fourth will be dedicated to conventional lighting technologies,” Eric Rondolat, CEO of Signify, said in a statement.

As part of the restructuring, the Netherlands-based Signify says it expects to save over €200 million (around $218 million) annually, and in the statement, Rondolat indicated that job losses are coming. The changes have already begun and are expected to be complete by the first half of 2024.

A Signify spokesperson told LEDs Magazine that the company is not sharing a specific number of people affected but that it plans to “bring our non-manufacturing costs to within the range of 25–29 percent of sales.”

Signify is actually undoing some changes it made as recently as 2020 when it shifted from three business groups to four in a move designed to address declining sales, partly due to the fact that LED lights just last longer.

Philips Hue and WiZ both expanded from smart lighting into smart security this year, launching security cameras along with subscriptions for cloud services, as Signify looks to expand its revenue streams.

Hue also plans to require customers to create an account to use its products, something that was previously only necessary to access certain features. Signify has said this is primarily for security reasons and that customers will not be required to share any data without additional consent.

Both brands have also embraced the new Matter smart home standard, although the process took significantly longer than Signify had initially announced for Hue, and the rollout to WiZ products has been similarly slow.