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Toshiba to cut 6,800 jobs, focus on storage and energy

Mike Gee | Jan. 4, 2016
The plan follows the revelation of a financial scandal in July.

Toshiba CEO and President Hisao Tanaka (right) addresses a press conference on July 21, 2015, in Tokyo at which he resigned over an accounting scandal. Chairman Masashi Muromachi (left) replaced him.
Toshiba CEO and President Hisao Tanaka (right) addresses a press conference on July 21, 2015, in Tokyo at which he resigned over an accounting scandal. Chairman Masashi Muromachi (left) replaced him.

Toshiba Corporation has announced that Toshiba Group will implement a series of management measures under a Toshiba Revitalization Action Plan. This plan will include reducing its headcount by 6800, about 30 per cent of its global total.

It has four strands: Decisive Action on Business Structural Reform; Strengthen Internal Controls and Reform the Corporate Culture; Review the Business Portfolio and Operational Structure; and Reforming the Financial Base

The company said by implementing and "resolutely executing this action plan", it hoped to regain the trust of shareholders, investors and all stakeholders, and to achieve a strong corporate constitution.

The plan follows the announcement of a $US1.25bn accounting scandal revealed in July.

The full details of its action plan as presented in a statement follow.

Decisive Action on Businesses Structural Reform

In addition to previously announced restructuring measures, Toshiba has decided to pursue structural reform of the PC, Visual Products, and Home Appliances businesses in the Lifestyle Products and Services business segment.

Through these measures, the Lifestyle business segment will reduce its headcount by 6800 employees by March 31, 2016.

(1) Basic Policies

PC Business: Further realize low cost business operation, and consider alliances with third party companies as future option.

Visual Products Business: End all development, production and sales outside Japan and replacing with brand license business structure in overseas market. Concentrate on the Japanese market

Home Appliances Business: Further improve operational efficiencies, and consider alliance with third party companies as future option.

(2) Action Items

PC Business:

・Concentrate on B to B: The PC business will concentrate on its B to B business, where further global demand is expected, and build up its enterprise customer base as a means to generate healthier profit. B to C operations will concentrate on the Japanese and the US market where stable business can be expected.
・Reform of business structure: In order to transform to an operational structure that generate profits, with the downsized global sales of the scale of 3 million units a year, the number of indirect employees will be reduced, operating sites will be optimised, and business processes will be changed to reduce fixed costs. In addition, the PC business will end consignment of design and manufacturing to outside vendors, and cease buy and sell transactions. By concentrating on in-house design and manufacturing, product platforms will significantly be reduced to below one-third of the current number.
・Company Split: The Personal & Client Solutions Company will be split off from Toshiba Corporation and merged with Toshiba Information Equipments Co., Ltd., a B to B PC sales company in Japan, to improve operational efficiency. This Company Split is planned for April 1, 2016

 

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