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Toshiba announces heavy job cuts for unprofitable TV division

Toshiba announced today that it is halving staff numbers at its TV division from 6,000 to 3,000 employees. The Japanese manufacturer will also close two out of three of its overseas TV factories in favour of transitioning to more outsourced production.

The moves are part of the drive announced in July to slash 10 billion yen (£62.5 million) from the running costs of their TV and PC groups.

This drastic series of cuts represents the most recent of the company's efforts to downsize its unprofitable divisions. Despite releasing a hotly-anticipated range of 4K Ultra-HD TVs earlier this year (opens in new tab), Toshiba's TV arm has struggled to justify its size since falling far short of profitability estimates.

Industry experts believe that the increasing popularity of smartphones and tablet computers has led to a lack of demand for liquid-crystal-display TVs and desktop PCs, and this rapid consumer shift is thought to have contributed to much of the firm's recent losses.

The ailing digital products division of the manufacturing giant widened its losses last year to a shocking 16.3 billion yen (£103 million) from a loss of 3.3 billion (£20.8 million) a year earlier, a fivefold loss that saw confidence plummet - not only in the future of Toshiba's market share, but in the future of the TV market itself.

In a statement released today, the company promised to "implement structural reforms", and make moves towards "improving profitability and strengthening the foundations of the business." It also announced the end of sales to non-specified "unprofitable regions."

Part of Toshiba's planned restructuring is to focus most of its manufacturing efforts on its new range of large screen Ultra-HD 4K TVs, an area where the company expects to see some growth in demand. With Japan set to become the first country to broadcast 4K-resolution video via satellite in time for the 2014 World Cup, this could easily be a good investment.

Still, with shareholders still reeling, and another 20 billion yen (£125 million) in cost-cutting tabled for the following fiscal year, things are still far from serene in Tokyo.

Paul Cooper
Paul Cooper

Paul has worked as an archivist, editor and journalist, and has a PhD in the cultural and literary significance of ruins. His writing has appeared in the New York Times, The BBC, The Atlantic, National Geographic, and Discover Magazine, and he was previously Staff Writer and Journalist at ITProPortal.