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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.

Reform of Corporate Culture:
・Evaluation system for the President & CEO
・360 degree surveys of executive managers
・Executive management seminars
・Employee awareness surveys
・CSR workplace meetings
・Improvements in information disclosure

Examination of the Advisor system
Abolition of the posts of “Advisor to the Board” and “Advisor” as positions for retired
executives is being considered.

Review the Business Portfolio and Operational Structure

Within the process of developing mid-term plans, starting from FY2016, the Company will discuss the following items and finalize the plan by the end of March 2016. The Company plans to announce its management policy at the same time as it completes the next mid-term plan.

(1) Business Portfolio

・The Company had redefined its focus business areas, and concluded that it will focus on the energy and storage businesses.
・The Healthcare business has achieved high profitability and a global presence in diagnostic imaging. However, securing further business growth requires the allocation of sufficient business resources for research and development and others. Given this, the Company has decided that, in order for the Healthcare business to realize its potential to the full, and to maximize its value to the full, the best solution is to invite outside majority shareholder(s) to make sufficient support for the Healthcare business. This will also, at the same time, strengthen Toshiba’s balance sheet. Toshiba Corporation and Toshiba Medical Systems Corporation will collaboratively give immediate priority to executing this plan.

(2) Establishment of a small but strong headquarters and review of the business
operational structure

・The Company will slim down corporate staff functions, and concentrate the corporate staff’s
mission on strategic planning for the future. In order to downsize the corporate staff, the
Company will create a common platform for the Toshiba group, and enhance the organisational
efficiency. At the same time, in support of the operational shift to independent autonomous management of the in-house companies, functions needed for business operations will be transferred to the in-house companies. Through these measures, the Company aims to establish a small but strong corporate function, and has also decided to implement a personnel rationalization program, including an early retirement incentive program targeting corporate staff members. With this program, and by reviewing activity expenses, the corporate headcount will decrease by about 1000 and operating costs will be cut by approximately 20 billion yen by Marc2016.

・The company will focus on cash flow in planning mid-term business plans, budgets, business performance management and business performance evaluation, and also strengthen management of interest-bearing liabilities by the in-house companies.

Reforming the Financial Base

Reflecting on the fact that it fell into an overriding concern for current profit, the Company will continue to promote business management emphasizing cash flow, and give first priority to restructuring for recovery from a weakened financial platform.

 

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