In a gloomy end to the year, Toshiba has announced that it will cut 6,800 jobs from its PC, video and consumer electronics divisions – representing 3% of the firm’s total employees. The cuts will be made by March.
The news follows Toshiba being caught admitting that it had falsely inflated its profits for several years, going back to 2008 (Toshiba CEO Resigns Over Accounting Scandal).
In addition to refocusing its business on chips and nuclear energy, Toshiba will sell its TV manufacturing plant in Indonesia. Compal was said to be showing interest in the plant this April, but Toshiba has confirmed that the plant will be sold to Skyworth. The final sales price will be settled, and transfer completed, by March 2016. Skyworth will also license the Toshiba brand name throughout Asia, excluding China – this extends Toshiba’s licensing agreements, already active in the USA and Europe, to a new region.
Going forward, the company will end all development, production and sale of visual products outside Japan, and replace them with a brand-licensing model. We highlighted a similar change taking place in MEA last week, through the partial sale of shareholdings in joint venture companies in Egypt that respectively manufacture and sell TVs (New Toshiba Plan May Include PC Sale).
Toshiba will refocus its TV business in Japan on profitable high-end models, and expects annual sales of around 600,000 units.
In its new business plan, Toshiba highlighted the changes to its PC business. In the future, the company will reduce costs and ‘consider alliances’ with third parties. B2B will be the main area of focus, with B2C products mainly being sold in Japan and the USA. Global sales are expected to be on the level of 3 million units per year. With this in mind, Toshiba is ending its reliance on OEM partners and focusing purely on in-house development. PC platforms will be reduced to ‘below one-third’ of the current number.
In the same statement, Toshiba has said that it expects a ¥550 billion ($4.5 billion) loss for this financial year, due to restructuring costs.
Analyst Comment
Now Toshiba’s small presence in the CES exhibitor list begins to make sense. Although the company is listed, there is no stand location, hall number or hotel suite. In previous years, the company has had a spot in the Central Hall of the LVCC, with other tier one makers like Sony and Samsung.
The component business – Toshiba’s new focus, according to the statement – will be in the Westgate. (TA)
