Toshiba Plunges on Reports It Will Post $4 Billion 2015 Loss

20 Jan 2016 | Author: | No comments yet »

Scandal-hit Toshiba cuts jobs, sells plant, projects red ink.

TOKYO (By Makiko Yamazaki, Reuters) – Japan’s Toshiba Corp said on Monday it will cut nearly 7,000 consumer electronics jobs after a $1.3 billion accounting scandal, in an overhaul that will streamline the sprawling conglomerate into a company focused on chips and nuclear energy. Toshiba said it would drastically shrink its loss-making television business, cutting 3,700 jobs there—or nearly 80% of the total—and will sell a plant in Indonesia.TOKYO — Scandal-plagued Japanese manufacturer Toshiba Corp is cutting 6,800 jobs after projecting a net loss of ¥550 billion yen (S$6.49 billion) for the fiscal year through March 2016.

It also said it planned to seek buyers for a majority stake in its health-care business, which the company had previously described as a growth driver. Finding a majority owner that can invest aggressively “will maximize value for the company and for customers and allow the health-care business to fulfill its potential to the greatest extent possible,” Toshiba said in a statement.

Toshiba’s chief executive resigned in July after the company acknowledged that it had overstated profits by more than ¥150 billion over seven years. Toshiba, which also makes nuclear power plants, has repeatedly apologised after acknowledging it had systematically doctored its books over several years to inflate profits by ¥152 billion yen. It also reported a 37.8 billion yen net loss for the last financial year to reflect more costs and conservative estimates on operations, including the South Texas Project, a U.S. power plant project.

An independent accounting probe said in July that the company suffered from dysfunction in governance and a culture of discouraging employees from questioning their superiors. The company launched the world’s first mass-market laptop in 1985 but has seen its consumer electronics business dwindle amid price competition with Asian rivals. Japan has turned away from nuclear power in the wake of the Fukushima Daiichi nuclear-power plant meltdowns in 2011, while the U.S., where Toshiba nuclear subsidiary Westinghouse Electric is based, has also grown chillier toward nuclear power because of the availability of inexpensive natural gas. Toshiba, a world leader in high technology, is a diversified manufacturer and marketer of advanced electronic and electrical products, spanning information & communications equipment and systems, Internet-based solutions and services, … read more »

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