Scandal-plagued Toshiba Corp. on Monday unveiled wholesale restructuring plans in an aggressive move to return the ailing electronics firm to profitability which will include some 7,800 jobs being slashed from its workforce.
The firm which has been embroiled in one of the biggest accounting scandals to hit a major Japanese firm said that before the effects of its restructuring initiatives take effect, it expects to log a record group net loss of 550 billion yen (4.53 billion U.S. dollars) for the current business year through March.
Further adding to the firm's woes, its stock plunged 10 percent Monday and they have lost half their value since March this year.
But President Masashi Muromachi remained steadfast at a press conference earlier Monday, stating that he would do his utmost to regain the public's trust.
"I will take the leadership so Toshiba will start anew as a company that can gain public trust," Muromachi said, adding that he personally felt a deep sense of responsibility for the appalling earnings outlook for this year, noting that the accounting scandal had seriously damaged the fiscal health and reputation of the conglomerate.
He said that 6,800 jobs, or 30 percent of the total workforce, would be cut from its ailing consumer electronics and appliances unit, with a 1,000 more being hacked from its headquarters operations.
Some will find other positions within the company, others will be offered early retirement packages, but the majority will have no choice but to just leave, the company has confirmed.
Muromachi intimated Monday that selling Toshiba Medical Systems Corp. may be on the cards as part of the restructuring plans, while dumping its overseas TV production businesses and focusing on corporate customers and heavily streamlining its loss-making PC business were also part of the new plan.
Toshiba may align its PC business with Fujitsu Ltd. and Vaio Corp. - a by-product of Sony's former hardships competing in the ever-competitive international PC arena - while a merger with Sharp Corp. has been eyed as giving Toshiba's white goods business a boost, sources close to the matter said Monday.
The accounting debacle has been the worst crisis to hit the company in its 140-year history and Japan's Financial Services Agency watchdog has said it will prevent Toshiba's corporate auditor from receiving new contracts for a period of three months, to account for its inability to detect the firm's huge accounting irregularities.
The firm's auditors failed to detect the fact that its management had been complicit in padding profits for almost seven years, with the revelation coming to light costing the firm 40 percent of its value and meaning that record fines have now been levied on the firm.
The auditor's Chairman and CEO Koichi Hanabusa is likely to step down to take account for the scandal as Toshiba, the world's first company to produce a laptop computer and DVD player, is looking likely to maneuver away from the appliance market as competitors like Samsung Electronics Co. and a number of Chinese makers are increasingly dominating the market, causing other Japanese brands like Panasonic and Mitsubishi Electric Corp. to move away from the loss-making appliance businesses.
