This has been a long process that started right after Philips' near-bancruptcy in 1990.

The CEO back then was Jan Timmer who took drastic measures by sacking 45,000 employees (operation "Centurion"). He stopped the financial bleeding and was seen as the saviour of Philips. But Timmer paved the way for a slow but sure dismantling of Philips and opened the door for outsiders to lead Philips.. Timmer started to close many factories and to sell off many loss-making activities.

Enter the next CEO: Cor Boonstra in 1996. This grocer and former CEO from Sara Lee  -with no affinity for technology- just retired in the Carribean, got bored and accepted the offer to become CEO of Philips. He inherited a Philips back in good shape. Boonstra introduced the "business unit" models and coined the term "core" and "non-core" activities. A whole lot was considered "non-core" and was thus closed or sold: e.g. Philips Components, Industrial Electronics to name but a few. Some are now independent (FEI) or bought up by others (Vishay). It was him who championed the term "shareholder value". So it was clear who was impoertant to the company. Employees were reduced to "stakeholders". Philips HQ was moved from Eindhoven to Amsterdam. The reasoning behind this move was that the name Eindhoven did not ring any international bell unlike Amsterdam. Obviously, Boonstra had no sentimental ties with the Philips history and its hometown Eindhoven.

In 2001 Boonstra was succeeded by Kleisterlee, a man with Philips roots. Personnel were delighted to see Boonstra go and see him replaced by what they thought was a "true Philips man". But Kleisterlee was another cuckoo in the bird nest and continued to execute Boonstra's approach which culminated in the sale of Philips Semiconductors which then became an independent company called NXP. Philips Semiconductors was led by Frans van Houten and he also became CEO of NXP till 2009 when he went to the ING financial group as advisor.

Kleisterlee hatched the "Delight" reorganization plan for Philips Lighting which resulted in the closings and sell-offs of many Lighting factories. The 2008 financial crisis was a golden excuse to execute "Delight": the false impression was created that Philips Lighting was in grave danger and that only a painful restructuring could save it. The term "Delight" was not about "delighting customers" but about literally turning off the lights at Lighting. A lot of valuable engineering people with crucial expertise were encouraged or forced to leave, creating a big gap for Philips to make a swift and smooth transition from traditional lighting (fluorescent, HID) to LED lighting. In hindsight, "Delight" can be seen as a logical step to sell off Philips Lighting.

When Kleisterlee resigned in 2010, Frans van Houten returned to Philips and became CEO. It is only natural for him to keep splitting up and selling Philips in more separate entities (TV & Audio, LumuLEDs, Automotive). Reorganizations were there to stay
("Fit to Grow") and van Houten's reasoning -just as the shareholders'- is that a split-up Philips represents more shareholder value value than Philips as a whole. Just like his two predecessors, the focus of this CEO is solely on short-term financial results and that only. The whole concept of workmanship pride, tradition and true innovation is alien to him.

For that I wouldn't blame the CEO's.
Whoever there was at any time,  had to do one thing: Follow whatever "strategy" the shareholders have decided.

Why the shareholders should make such suicide decissions?
Well, if you look, what happens on the stock market, it will become way more clear: Stock trade became a kind of gamble, buy for cheap, wait till the wave boost the stock prices and sell for more being the main way of making money there.
So majority of investors (so the decission makers) own the shares for only short time, so want their price to grow as much as possible in that short period of time and don't care what happens to the company once they sell the shares. So then their priority is obviously the short term benefit rather than long term growth, so obviously they install that CEO, who will do just that for them.

This cancer of speculative investments ruling the stock markets did spread over the complete economy, it's victim is not only Philips, but virtually all larger companies around the world. And there is no apparent power to stop it - too many people made too big fortune in that way, so they do not want to give up...
And still, to too many decission maker politicians this "fast investment" equal to "fast money" to help the companies for some time, when they become short of cash needed for the "daily expenses", so appearing to push the lay offs to the next "voting cycle", so ensures him to be elected again.

Well, I do hold the Philips CEOs accountable for the decisions they took since they took them willfully with the approval of the Philips Board of Directors and the Philips Supervisory Board. They could instead have chosen to refuse the execution of strategies/plans or simply to step down. But they didn't. Instead, they all actively participated in what may very well soon result in the end of the Philips company as we know it.

Maybe the decisions made have a valid, economic reason behind them that does not entail purely instant monetary gains. However, that's not what I deducted after reading some of the internal corporate communication to the Philips employees. It was full of euphemistic, empty corporate mumbo-jumbo rethorics and not convincing at all; see here for yourself:

Dear colleagues,

Today is an important day in the history of our great company. For 123 years, Philips has been a leader in building and shaping markets with our meaningful innovations. We’ve evolved from an important, but small company in the Netherlands over 120 years ago, to a global leader in healthcare, in lifestyle and in lighting. Our passion to improve people’s lives has always guided us – staying true to our vision of making the world healthier and more sustainable through innovation.

That vision and passion is as true today as it was over a hundred years ago. And now we’re ready to take our next strategic step forward.

Today, we are announcing the next phase of our Accelerate! transformation, moving from one company structured around sectors, to two focused and agile, global companies with the ambition to be industry leading.

Royal Philips is going to shape the future and become a global leader in HealthTech. We’ll do this by combining our Healthcare and Consumer Lifestyle businesses into one company. That company will deliver clinical and consumer innovation and target huge opportunities along the converging health continuum, where consumer and clinical health solutions are delivered in the hospital and in the home.

At the same time, Philips Lighting will become a focused and independent Lighting solutions company. This will better position us to capitalize on the fundamental changes taking place in the lighting industry, where value is shifting from individual products to systems and services. As a stand-alone company, the Lighting solutions business will benefit from improved speed and agility in its operations, to deliver innovation that boosts growth in connected LED lighting systems and services. Over time we will also consider various options to transition our Lighting solutions company into a separate legal entity and ownership structure, continuing to leverage the Philips brand, and with direct access to financial markets. This will provide additional investment to build for the future.

To achieve this transformation, from January 1, 2015, we will integrate Consumer Lifestyle and Healthcare and implement a new Operating Model which will allow all our Business Groups and Markets to drive performance end-to-end, with a single value-added layer providing world-class functional support. This will help us deliver more customer focus and speed-up decision making while also reducing overhead cost. We will start a careful process of establishing Lighting as a standalone company in the course of 2015.

I appreciate that these are significant changes, but they are needed now in order to remain competitive and to increase our focus on meeting the changing needs of our customers.

In the coming months we’ll ensure that you are kept up to date regarding the implementation of these changes and will provide opportunities for you to share your views and inputs.

This is an exciting and important step in our transformation journey. Thank you for your help, entrepreneurship and your continuing commitment.

Please watch the video on the intranet<http://mailing.philips.com/re?l=D0Ivf9mjgI8r00rk5I1> which provides further information.

With kind regards,


Frans van Houten
CEO Royal Philips

Dear colleagues,

This morning you received an important update from Frans, announcing the next phase of our Accelerate! journey, establishing two, market-leading companies focused on HealthTech and Lighting solutions. I want to share with you my perspective on what it means for Lighting.

Today’s news is positive for us. To-date we have made strong progress transforming our business and capitalizing on the significant changes in the lighting industry. As a stand-alone company we will move faster and further. We will be focused and agile and make strategic choices to strengthen and build our portfolios to achieve higher, profitable growth.

Our mission, vision and four-pillar strategy remain unchanged. Our strategic focus is on LED lamps, luminaires and connected lighting systems and services, as seen by combining Lumileds and Automotive lighting into a stand-alone component-focused company.

In time our business will transition into a separate legal entity and ownership structure, leveraging the Philips brand and with direct access to financial markets.  This will provide additional investment to build for our future and with it increased opportunities. Our operational improvements, for which you have contributed – marked by eight consecutive quarters of profitability – have given us the foundation to make this move possible and for us to win in a growing and attractive market.

To enable this transformation, from January 1, 2015, Lighting will implement an Operating Model where Business Groups and Markets drive performance end-to-end. We will continue to leverage the Philips functions and infrastructure in the coming period as we transition to a standalone company over the next eighteen months.  We will make organizational announcements in several phases, the first in November.

As we undertake this journey together, it’s critical that we do not lose focus on our customers. What you can do now is to deliver on our quarterly and 2014 commitments. I’m counting on you all.

I know you will have lots of questions and your leaders will be supportive in answering your questions in the coming days and weeks.

As Frans said, this is an important day in our history. We’re taking control and shaping our future. We have a great opportunity ahead of us.

Sincerely yours,

Eric Rondolat
CEO Lighting

If the CEO wouldn't act as ordered from the shareholders, he would be replaced immediately.
If the boards want the company to go another directlon than the CEO is heading, they either let him to change the course or just replace him. At the end, the company will always go in the direction the Boards have decided, whatever the CEO himself would like or not. He is there to just execute whatever the Boards have decided on the high management layer.
In this matter his position isn't different from the last "minimum wage slave" - he has to just follow orders and repoirt results (well, the pay is obviously a bit different, but that is not the topic here).

Sad thing to hear but I agree that conventional lighting is yeasterdays business. I went and ordered a box of Philips TL-D super 80 36w/835 to stock some up while those are still made in Europe(Made in Poland) Does Philips has factorys left anywhere else in Europa than Poland (Was it that factory in Holland was closing 2014?)

Spin-off means their lighting division will continue to operate as a separate company. Read the letter in Lampwizard's second post:

Philips Lighting will become a focused and independent Lighting solutions company.