The technology business world has been all shook up in light of the scandal that had recently occurred in Toshiba (TYO: 6502). The Japanese conglomerate is one of the largest technological firms in the world, with their products and services ranging from IT to nuclear technology. Toshiba however, was recently embroiled in an accounting scandal that has left a black dot on the company’s reputation. Many business deals are now going sour due to the problems faced by the firm. Toshiba has also seen a drastic loss through business deals who are now trying to distance themselves from the company after the controversy.
The company has been fighting hard to put on a brave face in light of the scandal, and has tried hard to reassure the people and the business world that all is well. However, Toshiba has struck a larger piece of news by predicting that there will be an estimated, 4.5 billion dollars in losses that the company will undergo. The drastic loss has also resulted in an obvious job slash across the board in various business sectors that the company functions in.
In an effort to keep the company functional in the aftermath of the scandal, Toshiba will be axing nearly 7,000 jobs in the coming year. The New Year seems gloomy for the Japanese giant. Specifically, the company will be slashing 6,800 jobs as per the latest announcement, but experts suggest that there could be an additional number of job cuts in the company. By the end of the current fiscal year, Toshiba will be off-loading 30 percent of their workforce, which is a startling number of jobs. While the intent is to keep the company up and running with the job cut, it could also be construed as a weakening force in the market, and may give rise to additional problems.
The ensuing losses
The PC business of the company will witness the most number of job losses through the company’s austerity measures. Also, a majority of the contractors and vendors will also be relieved of their services. Toshiba also plans to realign their LCD business, and will be focusing strictly on Japanese and European markets. The television manufacturing wing will be sold off to an Indonesian company. The crisis that the company is facing will definitely give the company’s rival, Panasonic, a huge advantage to capitalize on the markets that Toshiba will lose out on.