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Toshiba to cut about 7000 jobs

Toshiba to cut about 7000 jobs

Japan

Toshiba , the Japanese electronics giant has announced plan to cut about 7,000 consumer electronics jobs and sales of its overseas television manufacturing plant after a $1.3 billion accounting scandal.

Chief Executive Officer of Toshiba, Masashi Muromachi, said the company would sell its television manufacturing plant in Indonesia due to restructuring costs, which include the sale of its Indonesian TV plant.

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.

By implementing this plan, we would like to regain the trust of all stakeholders including shareholders and transform ourselves into a robust business.

The company said it overstated profits beginning in the business year through march 2009. And has since began restructuring after an investigation of its accounts revealed businesses in poor health.

Restructuring is expected to push the company’s 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.

However, 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.

But analysts have questioned 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.

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