Philips to move company headquarters from Andover to Cambridge
The Dutch health care technology company Philips NV plans to relocate its North American headquarters from Andover to Cambridge, bringing with it about 2,000 employees.
The company said Thursday that in 2020 it will set up shop in a building now under construction at Cambridge Crossing, a large development underway on the Cambridge-Somerville-Boston line. About 300 ultrasound system manufacturing workers will remain in one building at the company’s Andover campus.
Philips is the latest major life sciences firm to relocate in and around booming Kendall Square, and the latest in a string of companies to leave behind suburban campuses for a spot in the core of Greater Boston.
The new facility will be a global hub for Philips’s health care technology business, combining innovation and commercialization units now in Andover with research and development operations already located in Cambridge. Philips has about 200 research employees at a site in nearby Canal Park, but the company hasn’t yet decided whether they’ll move into the new site.
Philips chief executive Frans van Houten revealed the move to employees at the company’s Andover campus Thursday afternoon. He said most of its more than 2,000 employees, other than the ultrasound unit, will be offered jobs in Cambridge. If some choose not to make the move, the company might recruit new employees in Cambridge as well, he said.
In an interview, van Houten described the move as part of his effort to transform what had once been a sprawling industrial conglomerate into an innovation business laser-focused on health care.
“This is all about location and proximity to innovation,” he said. “We need to be in the hot spots of health care innovation, close to universities, where you can find the talent for the next generation of innovation.”
Van Houten said Philips, which has sold off its traditional lighting and television businesses in recent years, has acquired about 14 health care companies globally, about half in the United States. “We’ve done a massive transformation toward health care technology,” he said.
The new site in Cambridge will be the largest Philips research and development center in North America, focused on high-tech products ranging from CT scanning machines to patient monitoring systems. It has other research sites in San Diego, Seattle, and Pittsburgh.
Philips also has about 300 employees in Framingham working in its home health care business.
The company will lease about two-thirds of a 430,000-square-foot office and lab building at Cambridge Crossing, which until recently was called NorthPoint. It’s the first large tenant to move to the 45-acre former railyard since developer DivcoWest bought it in 2015 and tweaked plans for the portion of the site that remains undeveloped. Those plans include a new Lechmere MBTA Green Line station, as part of that line’s expansion into Somerville, along with retail and park space, office buildings, and about 2,400 condos and apartments.
The building Philips will move into is DivcoWest’s first new construction on the site. The developer started work on it early last year, without having a tenant lined up.
“We are excited to welcome Philips to our vibrant life sciences community,” Cambridge City Manager Louis DePasquale said.
The move further cements East Cambridge — already the priciest office market in Greater Boston — as the go-to spot for tech and life sciences firms in the region, said Mark Winters, a broker with real estate firm Newmark Knight Grubb Frank, and will probably draw even more major names to Cambridge Crossing and other projects near Kendall Square.
“A lot of tech tenants are looking at the Fenway, Back Bay, Seaport these days,” Winters said. “This is a big-name company saying, ‘We’re doubling down on Cambridge. We see the value of being here.”
Mark Roopenian, who is spearheading the project for DivcoWest, said he hopes more companies follow Philips’s lead. The developer still has 165,000 square feet to lease in the building, and three more buildings to fill after it.
“This creates momentum,” Roopenian said. “The first one is always the hardest. But this is an international company that has decided to put their research people here, to access talent. It elevates everything we’ve been saying about this site.”
Philips is one of Europe’s largest companies, with $29.5 billion in global sales in 2016. Based in Amsterdam, it has 73,000 employees in about 60 countries, including about 21,000 in North America.
In 2008, the company said it was moving its North American headquarters to Andover from New York. That was followed by a move in 2015 to relocate its upstate New York research center to Cambridge.