Toshiba to slash 5% of workforce
Company predicts record $4.5bn loss for the fiscal year
Toshiba announced on Monday that it would cut at least 5% of its workforce in order to deal with what it expects will be a record loss of $4.5bn for the fiscal year.
The company made the announcement following talks on restructuring. Toshiba is still dealing with the fall-out from the discovery that its earnings had been overstated by $1.3bn since 2008. The accounting error prompted a major restructuring drive, which resulted in a number of top-level resignations.
In terms of the job cuts, Toshiba said that the consumer electronics division would be worst hit - around 6,800 jobs are to go. The company also said that it will sell off its TV assembly factory in Indonesia, a move that will see it effectively exit the TV business.
"By implementing this plan, we would like to regain the trust of all stakeholders and transform ourselves into a robust business," said CEO Masashi Muromachi at a press conference yesterday.
However, analysts question just how effectively Toshiba will be able to recover from this disaster. The company's shares are down 40% since the accounting scandal came to light earlier this year, and with more losses expected for the short to medium term, shareholders are spooked.