Scandal-hit Toshiba cuts jobs, sells plant, projects red ink

The Nikkei business daily reported over the weekend the company is expected to forecast a record net loss of more than 500 billion yen ($4.13 billion) for the fiscal year on restructuring costs.

Toshiba shares plunged 10% Monday in anticipation of the reorganization.

Prior to the media reports on Toshiba’s probable loss this fiscal year, the average of analyst estimates for net income was ¥56.6 billion, compared with a ¥37.8 billion loss the previous year.

In November, Toshiba said it might sell a stake in its semiconductor unit. The job cuts equal about 3 percent of Toshiba’s overall employees. The $4.5 billion annual loss will result from restructuring costs, poor performance from the company’s energy and electronic devices divisions and income tax payments.

In a related development, Japan’s financial watchdog, the Financial Services Agency, is arranging to prohibit Toshiba’s corporate auditor from taking new contracts for three months for negligence and failure to uncover the accounting irregularities, another source said the same day.

The laptops-to-nuclear conglomerate said it would also sell its TV manufacturing plant in Indonesia. The company acknowledged in July that it had overstated profits by more than Yen150 billion over seven years, and then-President Hisao Tanaka resigned.

Toshiba, the world’s first company to produce a laptop computer and DVD player, is looking likely to maneuver away from the appliance market as competitors like Samsung Electronics Co. and a number of Chinese makers are increasingly dominating the market, causing other Japanese brands like Panasonic and Mitsubishi Electric Corp.to move away from the loss-making appliance businesses.

Toshiba has also said it is considering combining its PC operations with those of Fujitsu and Sony spin-off Vaio.

“It just keeps coming, and there is still a lot to do – it’s a very opaque company”, he said of the accounting scandal.