Toshiba predicts $4.5bn loss, plans to fire 7000 employees

20 Jan 2016 | Author: | No comments yet »

It’s The End of Toshiba As You Know It.

Over the weekend, The Wall Street Journal and other media reported that Toshiba was set to forecast a $4.1 billion net loss for the fiscal year through March, sending shares down 9.8% on Monday.Japan’s Toshiba Corp TOSBF -2.54% said 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 also said it would sell its television manufacturing plant in Indonesia, and that eventual job cuts spanning the entire PC-to-nuclear company could be over 10,000 including previously announced cuts and those seeking voluntary early retirement.

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. This is partly due to $1.9 billion of restructuring costs, reflecting the high cost of laying off workers in Japan, where the law requires generous severance packages. 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. Before the latest job cuts, Toshiba had already restructured each of these businesses twice over the past few years, with round after round of layoffs. Toshiba is now considering a spinoff of its PC business, which could combine with the computer business of Fujitsu , and possibly also Vaio, formerly of Sony, to form a national champion.

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