Toshiba expects to face a massive 550 billion Yen ($4.5 billion) loss for 2015, far worse than at the height of the global financial crisis. The 140-year-old company also announced to cut 7,800 jobs by March 31st, 2016.
Toshiba said, on Monday it will slash the jobs in its personal computer, video product and consumer electronic businesses which will affect about 30 percent of the consumer-electronics business and represent about 3 percent of Toshiba’s overall employees.
The Japanese tech giant has decided to enter into a major restructuring mode as it has been struggling with the aftermath of one of Japan’s biggest accounting scandals, compounded by troubles in nuclear energy and losses in the business that makes personal computers, TVs and consumer appliances.
“By implementing this plan, we would like to regain the trust of all stakeholders and transform ourselves into a robust business,”
Says the Chief executive of the company, Masashi Muromachi.
The accounting scandal has turned into a wider crisis affecting nearly all of Toshiba’s significant units. Shares in the company plunged 9.8% Monday and have lost more than half their value since March.
The company said its job cuts in Japan will come through early retirements, but a significant number of overseas jobs will also be involved and steps will vary by each nation. It would shed 6,800 jobs in its consumer electronics and appliances unit, and a further 1,000 jobs in its headquarters operations.
While a few of the affected employees might find other positions at Toshiba, most will leave the company, Masashi Muromachi said.
Toshiba will also shut its audio-visual business in all countries except Japan, and instead focus on licensing its brand in foreign markets. It would also seek to sell divisions in trying to recover from a $1.2 billion accounting scandal uncovered this year.