Royal Philips Electronics (PHG) says it will follow the relevant Chinese labor regulations and work closely with local government at various levels to protect the interest of its employees affected by the transfer of its mobile phone service to China Electronics Corporation.

Philips says that the transfer of its mobile phone service to CEC is the result of a shift in business, and Philips says it has had good relations with CEC for a decade.

In a statement to media, Philips adds that as a responsible multinational company, it will take full consideration on the allocation and settlement of the staff affected during the process and abide by Chinese labor laws and regulation. The company says it will actively consult with the employees to respect their decisions on whether to leave or continue to work for the company.

In October, Philips signed a letter of intent to transfer its remaining mobile phone activities to CEC. CEC will take over the responsibility for Philips' mobile phones business, which currently has an annual turnover of approximately EUR400 million and approximately 240 employees, mainly in Asia Pacific and Eastern Europe. Under the terms of the letter of intent, CEC will receive a global license to market and sell mobile phones under the Philips brand for the coming five years.