Japan's Toshiba 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.
Continue Reading Below
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.
Due to restructuring costs, which include the sale of its Indonesian TV plant, Toshiba said it expected a net loss of around 550 billion yen ($4.53 billion) in this fiscal year ending in March.
"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.
Toshiba confirmed in August that it overstated profits going back to fiscal 2008/09 by 155 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 U.S. 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's stock has fallen about 40 percent since news of its accounting problems began to emerge in early April. The scandal and subsequent earnings restatements highlighted weaknesses in a range of Toshiba's businesses.
Analysts have said restructuring was long overdue. 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.
The change in fortune highlights the decline of the 140-year-old conglomerate, which remains highly influential in the Japanese business community. Over the years, its former executives often played key policy advisory roles in government.
(Reporting by Makiko Yamazaki; Writing by Ritsuko Ando; Editing by Nick Macfie and Christopher Cushing)