"The fourth-quarter results reflect the serious consequences of  the global financial and economic crisis and the measures taken by management accordingly," Gerard Kleisterlee, the firm's chief executive, said in a statement.

In view of falling demand, management was giving "absolute priority to cashflow, at the expense of profit if necessary, and to speeding up restructuring and adjustment measures," he said.

Overall, Philips made a net loss of $242m in 2008, having recorded a net profit of $5.49bn for 2007.

Cutting costs

Corus, which is owned by Indian firm Tata, hopes its planned 3,500 redundancies will help it recover from the fall in global demand for steel.

Reports said that 2,500 of the job cuts would be in Britain.

Corus also announced a series of cost cuts including mothballing a mill in South Wales and restructuring several parts of its business.

John Wilson, senior officer of the GMB union, said the planned cuts were "a body blow" for manufacturing in Britain.

"It is essential that the UK government offers this industry the same support being offered to the banking sector because, just like banks, steel is the bedrock of our economy," he added.

The company predicts that the job cuts, along with other measures, should help raise operating profits by more than $277m per year.

David Litterick, a company spokesman, said talks with the British government about providing help to the newly unemployed are ongoing.

"We are still hopeful that something will be agreed," he said.