The Death of Europe's Last Electronics Giant

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Philips was once the largest tech company in Europe, the world leader in lighting, radio and physical media, the third largest electronics company in the world, etc. Today they are almost irrelevant. Here's why.
The Story Behind - ep. 95

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[rogerwilco]

I worked at the Philips physics lab (NatLab) for a while in the mid-nineties. I have two clear memories from that time that showed the state of the company:
1) There were "idea boxes" in several locations, but nobody would empty them.
2) I know a guy there that was a very early adopter of MP3, and suggested the walk-man division to make a portable MP3 player two years before the first ones hit the market. He was laughed out of the room, mostly because he didn't have a PhD.
The management was very top down, and very hierarchical, only those with the highest levels of academic training and management levels were allowed to have any ideas. This made it impossible to notice trends and made it a very inward looking organisation.

[dand]

I worked for Philips in the 2010s. It's an extremely top heavy company that prioritizes paying outrageous salaries to the people working in Eindhoven over investing in developing new technology. Hard to compete when you spend all your money hiring middle managers rather than the engineers who do the work. I was a middle manager.

[peterjansen]

I am Dutch and into technology. I can tell you that Philips has been dying as a tech company for decades, in the 80's/90's it started to go downhill. Why? They cut on R&D in the Netherlands and internationally. They started to buy other companies (like medical diagnostic equipment) instead of developing technology. At its high point Philips got the greatest minds to its campus in Eindhoven to lecture the engineers, including Einstein.

[NSS]

Toshiba in many ways are similar. They invented flash memory and once had large memory division (now called Kioxia), sold image sensor to Sony, healthcare to Canon, sold home appliance to Midea (sell electronic under Toshiba brand), tv business to Hisense. Now mostly involved in non-consumer product like power plant, elevator, lighting, energy system, railway system, automotive parts, hydrogen.

[LamboSpyder]

As a techie, I believe there will be more such companies which will fail because of hiring more managers than engineers or skilled workers.

[Exdia]

I'm Dutch and my step father worked at Phillips for over 30 year. He lived all over Asia for years working for Phillips. He's been retired for over a decade now, but still gets his pension from Phillips, but has no love left for the company at all. He has witnessed the mismanagement and mistakes at Phillips first hand and has seen it get worse over the years during his retirement. The company is a former shell of itself and it makes him sad. The company was a lot bigger and important when he started there at the beginning of his career. He told me recently during Christmas holidays that the he knew and worked with the current CEO of Phillips. He said in the old days before he was CEO he would always point the finger at someone else and always find blame in someone other then himself when things went wrong. It's a shame Phillips could have been so much bigger and more important in the global electronic consumer market but it was all wasted due to bad decisions made primarily by management.

[IdeaBoxful]

Philips is an example of what happens when you replace engineers with MBA's and beancounters.

[unclepete]

I worked on an assembly line for Philips’ vacuum tubes in the early sixties! The transistor manufacturing part of the plant was out of bounds to mere mortals then, it was very hush hush...
PS: interesting bit of trivia: Philips, in cooperation with Gazelle ( a Dutch bicycle manufacturer) produced the first e-bike before the Second World War

[adamevans]

It's also left its mark on the actual geography of the Netherlands. Before Philips, Eindhoven was an insignificant city surrounded by some small villages, but due to Philips it grew into the large city it is today.

[rohypnotist]

My aunt spent her whole career working as an executive secretary and had a front row seat to all of it .She's been retired for 10 years now but her stories are fascinating .She worked for the second in command at the headquarters office.I got my first electric razor from her as a 12th birthday gift

[hooah]

I’m an engineer at Philips around Eindhoven, and while summing up certain facts may look bad, it doesn’t feel bad for me because all the talents and spinoffs that Philips produced have created a very successful tech industry around Eindhoven.

The company may be a shadow of what it once was, but the region is stronger than ever, which benefits many people.

[davidbrewer]

I spent nearly 40 years in electronics & at the turn of the milemium, Philips was one of my major clients. They were an amazing firm & being bound by confidentiality contract, allowed me access to thier R&D in Eindhoven where I spent a lot of time working on various things which included something called gun pitch modulation in CRT deflection. It was a fantastic invention & had they designed it maybe 5 years earlier would have been as big as the Trinitron was for Sony...

[meganharris]

I used to work at a company that was bought out by Philips (which was then rebranded to Philips Neuro) making brain scan equipment. I can't stress enough how horrified I still am by how little the management cared about making a quality product. Finding out their management has always made baffling decisions isn't too surprising.

[fazerider]

My father would have been saddened by this, though not surprised.
He worked for Mullard, which became Philips Research Laboratories, based near Redhill in Surrey, UK. He was frequently exasperated by Philips’ management decisions.

One year, Philips made a rather poor pay offer, but tried to sweeten the deal by including a fully funded private medical insurance package. The staff argued they’d prefer a better pay rise instead, but eventually accepted.
The medical insurance scheme came back to haunt Philips. It was a lifetime deal and covered a spouse too. Belatedly, they realised premiums were becoming extremely costly as the workforce aged and they decided to renege on the deal. The staff, many of them now retired, fought a group action in the courts and won. Philips then had to pay for both parties’ legal expenses in addition to continuing to fund the medical insurance.

In the eighties my father, together with almost every other member of staff over the age of 55 years, was made redundant because management decided the average age of employees at the lab was too high.

[royshaft]

The death cycle of big companies always reads the same, and should always be on your mind if you work at one .
My boss was very angry with us one day about feedback to improve my floors efficiency .
He opened the suggestion box he had installed, to find a note saying " read the suggestions " signed and dated from me, 4 months ago .

[Teporame]

I was an engineer at Philips consumer electronics. We used to say that the company was a tech giant with brittle marketing feet. I loved the company, the training, the culture, the pride to work there. I learned a lot. Very sad to see it gone. I was working for another company when the plant closed and I bought the last equipment before the closing. A tear runs down my cheek…..

[ChristianWagner]

My father worked at the Aachen Philips research lab for 30 years as an electronics engineer until the early nineties. The research was still interesting at the time developing fiber optics production quality control devices for example. The bureaucratic management style stifled a lot of innovation though and my father was generally dissatisfied with management together with other engineers in his group.

[victorshopov]

I work at the former Philips campus in Eindhoven and it is kinda sad to see all of old research labs being repurposed as office spaces. In fact the whole city was centered around Philips at some point, where entire neighborhoods would be just production facilities. Now they have all been repurposed for housing. Philips Research still exists, but as far as I know it is on a much smaller scale and they focus mostly on medical-related research. As you said, they have mostly given up on having their R&D stay in the Netherlands. The recent recalls of their respirators also caused a lot of problems for them, so I'm not that optimistic about their future given their track record. Seeing a giant fall this hard is both fascinating and sad at the same time.

[Asianometry]

I wanted to do a video on Philips' decline for a long time. Now the story has been so well done that I feel I can't ever make a video on it. Great work

[GPCBuilder]

it is sad up until 2:30 because ive had a philips indoor tv antenna from like the 90s and it still works. They will still be the tech giant they used to be in our hearts