Employment

Next - Liquidity and capital resources: Cash flows provided by continuing operations

The total number of employees of the Philips Group was 115,924 at the end of 2009, compared to 121,398 at the end of 2008. Approximately 45% were employed in the Lighting sector, due to the still relatively strong vertical integration in this business. Some 30% were employed in the Healthcare sector and approximately 16% of the workforce was employed in the Consumer Lifestyle sector.

The decrease in headcount in 2009 was mainly due to organizational right-sizing to align with the challenging economic conditions. The declines were partly offset by acquisitions, mainly at Consumer Lifestyle. Group Management & Services headcount was slightly higher than in 2008 due to a gradual shift of support functions such as IT from the operating sectors.

Approximately 57% of Philips’ workforce is located in mature markets, and about 43% in emerging markets. In 2009, the number of employees in mature markets decreased, largely as a result of organizational right-sizing. Emerging markets also saw a reduction in employee numbers as the additional headcount from Healthcare acquisitions in China, India and Brazil was offset largely by the sale of the Television factory in Juarez (Mexico) and a headcount reduction due to lower factory production within Lighting.

Despite the lower sales, employee productivity for the Group improved compared to 2008, driven by the positive effect of ongoing efﬁciency and transformation programs in all sectors.

Employees per sector in FTEs at year-end
	2007	2008	2009

Healthcare	29,191	35,551	34,296
Consumer Lifestyle	23,280	17,145	18,389
Lighting	54,440	57,367	51,653
GM&S	11,187	11,335	11,586
	118,098	121,398	115,924
Discontinued operations	5,703	−	−
	123,801	121,398	115,924

Employees per market cluster in FTEs at year-end
	2007	2008	2009

Western Europe	39,747	36,966	35,496
North America	21,682	31,336	27,069
Other mature markets	2,347	2,119	3,095
Total mature markets	63,776	70,421	65,660
Emerging markets	54,322	50,977	50,264
	118,098	121,398	115,924
Discontinued operations	5,703	−	−
	123,801	121,398	115,924

Employment in FTEs
	2007	2008	2009

Position at beginning of year	121,732	123,801	121,398
Consolidation changes:
- new consolidations	6,654	12,673	2,432
- deconsolidations	(3,535)	(1,571)	(276)
Comparable change	(1,050)	(13,505)	(7,630)
Position at year-end	123,801	121,398	115,924
of which:
continuing operations	118,098	121,398	115,924
discontinued operations	5,703	−	−

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Productivity
Philips uses Productivity internally and as mentioned in this annual report as a non-financial indicator of efficiency that relates the added value, being income from operations adjusted for certain items such as restructuring and acquisition-related charges etc. plus salaries and wages (including pension costs and other social security and similar charges), depreciation of property, plant and equipment, and amortization of intangibles, to the average number of employees over the past 12 months.