Toshiba Corp. (TYO: 6502) scheduled to cut 7,800 jobs on Monday December 22, which accounts for 4% of Toshiba’s total workforce, helping to save up $4.5 billion loss for the company. That brought the total number of layoff to 10,000 in 2015. The Toshiba company explained it would dismiss 6,800 jobs in its consumer electronics and applicants unit, and further 1,000 jobs in the headquarters operations. A few of the affected employees would look for other divisions within the company, while most employees will leave the company. Masashi Muromachi, Toshiba president, confirmed this statement.
Toshiba company started to restructure its lifestyles segment and costs following the biggest accounting scandals, which morphed into wider financial crisis in 2015. The company forecasted ¥550 billion ($4.5 billion) loss for the current fiscal year.
As part of restructuring business plan, the company has sold one of its factories in Indonesia for $24 million. The factory is responsible for producing television sets and washing machines. According to the New York Times, the company also sought a buyer for its healthcare business as well as Westinghouse, in which Toshiba owns an 87 percent stake.
Furthermore, Toshiba Corp.’s long-term senior bond rating has been cut two levels by Moody’s Investors Service to Ba2, from Baa3. Because the restructuring costs will exceed previous expectation and improve the earnings slowly in Toshiba, the Moody Service expects the Toshiba’s leverage will stay high in the following period. The downgrades were prompted by the structured reform plan and downward financial forecast of Toshiba, indicating the earnings and cash flow generations will be significantly below Moody’s previous expectation.