Dutch consumer and health electronics giant Philips has reported a fourth quarter loss of €1.47bn (£1.4bn) and will cut 6,000 jobs.
The company said the downturn has now reached the healthcare sector, particularly the key US market.
Despite a 9% growth in sales the healthcare business was hit by a weak US hospital market and margins more than halved.
Healthcare sales rose 18% due to the acquisition of US-based firm Respironics, but were down 2% on a comparable basis. Consumer lifestyle sales dropped 33% due to falling consumer demand.
"While the effects of the global downturn were felt most strongly in our activities that cater to the consumer market and to the construction and automotive industries, our healthcare sales are now impacted as well. We expect no material change to this situation in the second quarter," said Philips chief executive Gerard Kleisterlee.
Healthcare margins more than halved in the first quarter of 2009 to 4.3%. According to the Wall Street Journal the unit was hit by lower volumes and prices at imaging systems in the US.
The company, which is one of the top three global suppliers of hospital equipment, said it had continued to increase market share.
The company said the bulk of the losses stemmed from a fall in sales in its consumer lifestyle division.
Overall, Philips is now targeting annual cost savings in excess of €500m by the end of this year, up from its previous target of €400 million. Philips said this will include 6,000 job cuts.
Philips recorded total sales of €26.4bn for 2008.