Employment

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

Employment in FTEs
	2006	2007	2008

Position at beginning of year	159,226	121,732	123,801
Consolidation changes:
- new consolidations	4,834	6,654	12,673
- deconsolidations	(44,085)	(3,535)	(1,571)
Comparable change	1,757	(1,050)	(13,505)
Position at year-end	121,732	123,801	121,398
of which:
continuing operations	115,092	118,098	121,398
discontinued operations	6,640	5,703	−

Excluding discontinued operations (MedQuist in 2007), the total number of employees of the Philips Group was 121,398 at the end of 2008, compared to 118,098 at the end of 2007. Approximately 47% were employed in the Lighting sector, due to the still relatively strong vertical integration in this business. Some 29% were employed in the Healthcare sector and approximately 14% of the workforce was employed in the Consumer Lifestyle sector.

The main increase in employee numbers in 2008 was due to acquisitions, which added 12,673 employees. The main acquisition-related increases were within Healthcare (mainly Respironics) and Lighting (Genlyte).

This increase was partially reduced by the divestments in Consumer Lifestyle, primarily the North America television activities and the sale of Set-Top Boxes. Additionally, restructuring and business optimization projects resulted in personnel reductions across all sectors, mainly within Consumer Lifestyle and Lighting.

Employees per sector in FTEs at year-end
	2006	2007	2008

Healthcare	27,223	29,191	35,551
Consumer Lifestyle	24,419	23,397	17,346
Lighting	47,739	54,323	57,166
I&EB	8,832	5,888	5,324
GM&S	6,879	5,299	6,011
	115,092	118,098	121,398
Discontinued operations	6,640	5,703	−
	121,732	123,801	121,398

Approximately 58% of Philips’ workforce is located in mature markets, with 42% in emerging markets. In 2008, the number of employees in mature markets increased, largely as a result of the Genlyte and Respironics acquisitions. This increase was partly offset by restructuring programs across all sectors. Key emerging markets saw a reduction in employee numbers as additional headcount from the Healthcare acquisitions in China, India and Brazil was offset by the divestment of HTP Optics, the sale of the Television factory in Juarez (Mexico) and a reduction of employees due to lower factory production. The employee decrease in other emerging markets was largely due to low year-end production volumes in Hungary and the Lamps and Lighting Electronics factory in Poland.

Employees per market cluster in FTEs at year-end
	2006	2007	2008

Western Europe	39,722	40,244	37,452
North America	22,169	21,682	31,336
Other mature markets	1,831	1,850	1,633
Total mature markets	63,722	63,776	70,421
Key emerging markets	31,893	33,377	32,084
Other emerging markets	19,477	20,945	18,893
	115,092	118,098	121,398
Discontinued operations	6,640	5,703	−
	121,732	123,801	121,398

Sales per employee decreased from EUR 224,000 in 2007 to EUR 209,000 in 2008, affected by 3% unfavorable currency movements compared to 2007.

¹⁾	Annual sales divided by the monthly average number of FTEs.

Adjusted for the 3% adverse foreign currency impact in 2008, sales per employee declined 4%, largely due to Consumer Lifestyle, caused by a sharp decline in sales in the second half of the year, as well as Healthcare and Innovation & Emerging Businesses. The decline was partly mitigated by increases in Lighting and Group Management & Services.

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Discontinued operations
In the event of a disposal of a reporting unit as defined per appropriate accounting standards, the related financials including any gain of loss from disposal are separetly reported and presented as discontinued operations.