Toshiba to book record loss, cut 5 percent of workforce this year

Mon Dec 21, 2015 8:40am EST
 
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By Makiko Yamazaki

TOKYO (Reuters) - Toshiba Corp said on Monday it would book a record net loss this year and cut around 5 percent of its workforce as the sprawling conglomerate, reeling from a $1.3 billion accounting scandal, focuses on chips and nuclear energy.

But analysts question whether streamlining can return the 140-year-old Japanese bulwark to dominance considering falling profit margins in the chip industry and a nuclear phase-out in developed countries since the 2011 Fukushima disaster.

The change in fortune at Toshiba, whose former executives have led Japan's business lobby and advised governments, comes as the company's shares languish at 40 percent below their value in April when management first disclosed accounting problems.

Toshiba later said it overstated profits beginning in the business year through March 2009. It has since begun restructuring after an investigation of its accounts revealed businesses in poor health.

On Monday, Toshiba said restructuring will push its loss for the year through March to about 550 billion yen ($4.53 billion), far worse than at the height of the global financial crisis.

The firm will cut 6,800 consumer electronics jobs taking its total this year beyond 10,000, including those previously announced and seeking voluntary early retirement. It will also sell its Indonesian TV assembly plant, effectively exiting overseas TV production.

"By implementing this plan, we would like to regain the trust of all stakeholders and transform ourselves into a robust business," Chief Executive Masashi Muromachi told a news conference.

  Continued...

 
A visitor looks at a display of Japan's Toshiba company during the IFA Electronics show in Berlin, Germany in this September 4, 2014 file photo.  REUTERS/Hannibal Hanschke/Files