Toshiba to cut 7000 jobs in PC and TV units, sees FY loss

20 Jan 2016 | Author: | No comments yet »

Asian Stocks Advance as China Shares Rally With Oil Companies.

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.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.

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. The Shanghai Composite Index climbed 1.8 percent, after its biggest weekly increase in more than a month, as investors bet the government will accelerate reform of state-owned enterprises. China’s power industry plans to bring in more investors in a pilot program of mixed-ownership reform next year, the Economic Information Daily reports, without citing anyone. “There are expectations that the SOE reforms may see an acceleration or breakthrough at the ongoing central economic work conference,” said Wu Kan, a fund manager at JK Life Insurance Co. in Shanghai.

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 US 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. Toshiba sank 9.8 percent on reports it would post a record 500 billion yen ($4 billion) loss in the current fiscal year on costs related to an accounting scandal, layoffs and sales of business units. 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.

Asian shares are down 5.9 percent this year, on course for their first back-to-back annual declines since 2002, as a commodity rout deepened and investors speculated Chinese authorities will need to increase stimulus to support economic growth. 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. Asian equities retreated Friday and the yen jumped 1.1 percent against the dollar following the Bank of Japan’s tweaks to its stimulus program that disappointed investors. Governor Haruhiko Kuroda said the changes were designed to make it easier for the BOJ to maintain its current policy and didn’t constitute additional easing. “We do not think this is the final word from the BOJ,” Hartmut Issel, Singapore-based chief investment officer for UBS AG’s wealth management unit, told Bloomberg TV in Singapore. “The chance is quite a bit higher than 50 percent that they’re going to come again before April.

The U.S. equities gauge extended declines in the final 15 minutes of trading and volume soared because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire.

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