TOKYO (Web Desk): Toshiba seeks to eliminate up to 7,000 jobs mainly in its long-suffering consumer electronics segment, getting tough with money-losing operations that it tried to gussy up with specious accounting.
The Japanese electronics group entered the final stages of planning the payroll cuts on Monday. It is looking to drastically reduce operations at its Ome factory here, which makes televisions and personal computers, and may stop developing TVs altogether. Toshiba will announce the plan late this month
Its restructuring efforts began in earnest under new management in September. The fastest progress has been in noncore operations. The company has already decided to withdraw from the image sensor business and sell its stake in medical equipment maker Topcon.
The lifestyle segment, which includes appliances and other consumer products, is Toshiba’s worst-performing major division. It accounts for roughly a fifth of group sales and employed slightly more than 24,000 foreign and domestic workers as of March 31. Sales fell roughly 10% to 1.16 trillion yen ($9.63 billion) in the year through March, and it suffered a 109.7 billion yen operating loss.
Most of the 6,000 to 7,000 job cuts that Toshiba envisions will be in this segment. It plans to offer early retirement to some workers while relocating others.
The Ome plant, located west of central Tokyo, was founded in 1967 to make electronic calculators. It now houses the headquarters of an appliance subsidiary. Toshiba is looking to significantly reduce operations there and may even close the facility.
Toshiba plans to make significant cutbacks to TVs for sale at big-box stores in Japan, its main sales channel, opting for a more limited presence including affiliated retailers. Worldwide sales of its Regza-brand TVs totaled about 5.33 million units last fiscal year, down to nearly 40% of the most recent peak. While pricey 4K high-resolution models are selling relatively well, competition has eroded profit margins on the low end.
Toshiba is already shifting toward a brand-licensing model for its overseas TV business. It is looking to sell Indonesian production capacity to Chinese or Taiwanese manufacturers.
The company intends to focus its resources on power generation equipment, elevators, commercial air conditioning and other steadier-performing infrastructure-related businesses.