Philips announced a Euros 1.1bn loss for 2011 compared to a Euros 1.4bn profit for 2010 blaming the loss on the TV business which is to be sold.
CEO Frans van Houten said that the TV business is a mature, highly competitive, market in which it is difficult to maintain margin.
Q4 revenues grew 3% to Euros 6.7bn although, over the year, European sales fell 5%.
The Q4 loss was Euros 162m compared to a Euros 463m profit the year before. The TV business made a Euros 272m loss.
Van Houten praised his 120,000 "great and talented employees", but announced a programme for terminating 4,500 of them to save Euros 800m annually by 2014.
He said the majority of the cost savings would come this year and next.
"We are cautious about 2012 given the uncertainty in the global economy and in Europe in particular," said van Houten.