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Toshiba sees record US$4.5b loss, plans more job cuts

Monday, December 21, 2015 - 15:06
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Toshiba Corp forecast a record 550 billion yen (S$6.4 billion) loss for the current fiscal year following an accounting scandal and plans for job cuts and restructuring businesses that include televisions, personal computers and home appliances.

[TOKYO] Toshiba Corp forecast a record 550 billion yen (S$6.4 billion) loss for the current fiscal year following an accounting scandal and plans for job cuts and restructuring businesses that include televisions, personal computers and home appliances.

The industrial group plans 6,800 job cuts in the lifestyle division and also to sell its television factory in Indonesia, it said in a statement Monday. The company will also shut and sell its research complex in suburban of Tokyo.

Toshiba is narrowing the scope of its business lines after filing false financial statements, partly 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 it is pruning its TV and PC businesses to sharpen its focus on energy and memory and will keep selling off property and investments.

Shares of the industrial conglomerate fell as much as 9.8 percent, the most since May 11, to close at 254.8 yen in Tokyo trading before the announcement. The company has lost about US$9 billion, half of its market value, over the past eight months as shares plunged after initially announcing the accounting probe more than eight months ago.

President Masashi Muromachi is working with new management after former presidents Hisao Tanaka, Norio Sasaki and Atsutoshi Nishida resigned in July to take responsibility for the accounting irregularities.

The company said it would seek damages in a lawsuit against former executives, including the three and two former chief financial officers, over their role in the scandal.

Toshiba itself still faces lawsuits from shareholders, while it has vowed to avoid recurrence by bringing in more outside directors and it has has cut executive pay. Regulators have yet to announce results of probes seeking evidence for possible criminal prosecutions of former executives.

Toshiba announced the sale of its image-sensor chip operations to Sony Corp in October and has sold stakes it held in Finnish escalator maker Kone Oyj and Japanese medical equipment manufacturer Topcon Corp.

Toshiba had about 198,700 employees as of March 31, the lowest since at least 2009, according to data compiled by Bloomberg.

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