Toshiba (TYO:6502), amid a massive restructuring aimed at righting the ship after a $1.3 billion accounting scandal, said it’s looking for outside investors to buy a stake in its healthcare business and is laying off nearly 7,000 workers.
The Japanese tech conglomerate said it wants to focus on its core nuclear energy and chip businesses. That means massive job cuts for its consumer electronics business and the sale of a TV plant in Indonesia, Toshiba said. The total number of layoffs could reach 10,000, including cuts already under way and voluntary early retirement.
The restructuring also means that the company will seek a strategic investor for Toshiba Medical Systems; last week Toshiba denied rumors that it was looking to sell off its medical unit.
“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 & 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,” Toshiba said. “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.”
Toshiba said it expects to log a net loss of roughly ¥550 billion, or $4.53 billion, for the fiscal year ending in March.
“By implementing this plan, we would like to regain the trust of all stakeholders including shareholders and transform ourselves into a robust business,” it said in a statement.
Toshiba shares are off about 40% since news of the accounting scandal broke last spring. Ex-CEO Hisao Tanaka and 7 other senior Toshiba executives resigned July 21 after admitting that they cooked the books to show inflated profits. Toshiba later confirmed that it overstated profits going back to fiscal 2008/09 by some $1.29 billion (¥155 billion), reporting a -$314.6 million net loss (-¥37.8 billion) for the last financial year through March. Last week the company agreed to pony up $60 million to Japan’s security regulator.
Material from Reuters was used in this report.