In an overhaul that will streamline the sprawling conglomerate into a company focused on chips and nuclear energy Japan’s Toshiba has said it will cut nearly 7,000 consumer electronics jobs after a $1.3 billion accounting scandal.
The eventual job cuts spanning the entire PC-to-nuclear company could be over 10,000, said Toshiba as the company would also sell its television manufacturing plant in Indonesia. The number includes the previously announced cuts and those seeking voluntary early retirement.
Toshiba said it expected a net loss of about 550bn yen (£3bn) in this financial year ending in March due to restructuring costs, which include the sale of its Indonesian TV plant this would be greater than the loss that the company had posted in the year through March 2009 in the aftermath of the global financial crisis.
“I will take the leadership so Toshiba will start anew as a company that can gain public trust,” President Masashi Muromachi said at a news conference.
“By implementing this plan, we would like to regain the trust of all stakeholders including shareholders and transform ourselves into a robust business,” it said in a statement.
The company had conceded in August to have overstated profits going back to the 2008-09 financial year by 155bn yen. Reflecting in the increased costs and conservative estimates on operations, including the South Texas Project, a US power plant development, Toshiba also reported a 37.8bn yen net loss for the last financial year.
The company suffered from dysfunction in governance and a culture of discouraging employees from questioning their superiors claimed an independent accounting investigation in July. The accounting scandal resulted in the quitting of the company’s president and chief executive, Hisao Tanaka, in July.
Since news of its accounting problems began to emerge in early April, Toshiba’s stock has fallen by about 40 percent. The weaknesses in a range of Toshiba’s businesses were highlighted by the scandal and subsequent earnings restatements.
Restructuring was long overdue say analysts. Amid price competition with Asian rivals, Toshiba has lost out on the market share in the consumer electronics segment and the business dwindled even though Toshiba first entered the market in 1958 with the launch of the world’s first mass-market laptop.
Even as the company still remains highly influential in the Japanese business community, the decline of the 140-year-old conglomerate has been highlighted by the change in fortune of the company. Over the years, its former executives often played key policy advisory roles in government.
Analysts view this move by Toshiba to narrow the scope of its business lines after filing false financial statements as an effort by the company to conceal the waning performance of its personal computer operations, a mainstay within the electronics and power equipment maker’s consumer brands.
The company said Monday that it would keep selling off property and investments.
As shares plunged after initially announcing the accounting probe more than eight months ago, the company has lost about $9 billion, half of its market value, over the past eight months.
(Source:www.japantimes.co.jp & www.theguardian.com)
The eventual job cuts spanning the entire PC-to-nuclear company could be over 10,000, said Toshiba as the company would also sell its television manufacturing plant in Indonesia. The number includes the previously announced cuts and those seeking voluntary early retirement.
Toshiba said it expected a net loss of about 550bn yen (£3bn) in this financial year ending in March due to restructuring costs, which include the sale of its Indonesian TV plant this would be greater than the loss that the company had posted in the year through March 2009 in the aftermath of the global financial crisis.
“I will take the leadership so Toshiba will start anew as a company that can gain public trust,” President Masashi Muromachi said at a news conference.
“By implementing this plan, we would like to regain the trust of all stakeholders including shareholders and transform ourselves into a robust business,” it said in a statement.
The company had conceded in August to have overstated profits going back to the 2008-09 financial year by 155bn yen. Reflecting in the increased costs and conservative estimates on operations, including the South Texas Project, a US power plant development, Toshiba also reported a 37.8bn yen net loss for the last financial year.
The company suffered from dysfunction in governance and a culture of discouraging employees from questioning their superiors claimed an independent accounting investigation in July. The accounting scandal resulted in the quitting of the company’s president and chief executive, Hisao Tanaka, in July.
Since news of its accounting problems began to emerge in early April, Toshiba’s stock has fallen by about 40 percent. The weaknesses in a range of Toshiba’s businesses were highlighted by the scandal and subsequent earnings restatements.
Restructuring was long overdue say analysts. Amid price competition with Asian rivals, Toshiba has lost out on the market share in the consumer electronics segment and the business dwindled even though Toshiba first entered the market in 1958 with the launch of the world’s first mass-market laptop.
Even as the company still remains highly influential in the Japanese business community, the decline of the 140-year-old conglomerate has been highlighted by the change in fortune of the company. Over the years, its former executives often played key policy advisory roles in government.
Analysts view this move by Toshiba to narrow the scope of its business lines after filing false financial statements as an effort by the company to conceal the waning performance of its personal computer operations, a mainstay within the electronics and power equipment maker’s consumer brands.
The company said Monday that it would keep selling off property and investments.
As shares plunged after initially announcing the accounting probe more than eight months ago, the company has lost about $9 billion, half of its market value, over the past eight months.
(Source:www.japantimes.co.jp & www.theguardian.com)