Toshiba Plans Major Layoffs and Relisting on Tokyo Stock Exchange
Toshiba Corporation is planning to lay off thousands of workers in an effort to improve its financial standing and pave the way for a relisting on the Tokyo Stock Exchange. This information comes from sources familiar with the company's plans.
The details of the workforce reduction will be included in Toshiba's upcoming medium- to long-term business plan, which is expected to be released in mid-May. One potential method for achieving this reduction is by consolidating certain sections of Toshiba's numerous subsidiaries at its Tokyo headquarters.
This move comes after Toshiba was delisted from the Tokyo Stock Exchange in December 2023 following its acquisition by Japan Industrial Partners (JIP) in a public tender offer worth approximately 2 trillion yen ($13 billion).
Currently, Toshiba employs around 67,000 workers in Japan across a wide range of subsidiaries involved in various sectors, including social infrastructure, energy, and devices. While the exact number of planned layoffs remains unclear, sources indicate that it will be the largest workforce reduction since 2001, when approximately 17,000 employees were let go due to a major downturn in the information technology sector.
Toshiba's annual sales have also been halved, dropping from around 7 trillion yen to approximately 3 trillion yen, partly due to the divestiture of certain business operations. For the period from April to December 2023, the company recorded a net loss of 107 billion yen, primarily attributed to the underperformance of its hard disk sector.
Toshiba's goal is to relist on the stock exchange within five years. To achieve this, the company aims to improve its profitability by reducing payroll expenses and restructuring its business operations. Potential areas for future growth include energy, social infrastructure, and exploring new business opportunities leveraging its digital technology expertise.
Over the past decade, Toshiba has faced significant management challenges, including an accounting fraud scandal in 2015 and the bankruptcy of its U.S. nuclear power plant unit, Westinghouse Electric Co., in 2017. To stay afloat, Toshiba received approximately 600 billion yen from various overseas investment funds. This resulted in a significant portion of the company's shares being held by overseas investors, leading to conflicts between activist shareholders and Toshiba's management.