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Toshiba looking to layoff workers in underperforming sectors

Toshiba is thinking about laying people off in underperforming sectors and focusing more on lucrative operations, the company’s CEO said on Thursday.

According to a Reuters (opens in new tab)report, people might lose their jobs in the home appliances, TV and PC businesses. At the same time, Toshiba is looking for a partner for its nuclear operations.

The goal is to overhaul the company, after the $1.3 billion (£860m) accounting scandal.

"The latest accounting problems might have been driven by the fact that some of our businesses have lost earnings power. We must urgently take action in these businesses," Chief Executive Masashi Muromachi told a roundtable of reporters.

To get things done the right way, Toshiba has formed a management team, a move which was welcomed by shareholders.

Muromachi said that the restructuring steps may temporarily hurt the company's capital base, already weak compared with rivals such as Hitachi. Being placed on the Tokyo Stock Exchange's watch list, Toshiba is practically unable to raise funds through bond and equity issuance.

Muromachi added that, if need be, Toshiba can look to banks for loans.

Toshiba's nuclear power business, which has been the centre of investor attention, may need a partner, he said.

"The environment for the nuclear business is tough in Japan, and we need to address various issues to meet revised U.S. regulatory rules," he said.

Analysts have long speculated that the value of assets and goodwill related to Toshiba's 87 per cent stake in U.S. nuclear unit Westinghouse Electric has been overstated, though the company has insisted that there is no need for a write-down at least for now.

Toshiba paid $5.4 billion (£3.5bn) for a majority stake in 2006 at the height of the nuclear industry boom. But the Fukushima disaster and the U.S. shale boom have reduced the appeal of nuclear power.

Sead Fadilpašić
Sead Fadilpašić

Sead Fadilpašić is a freelance tech writer and journalist with more than 17 years experience writing technology-focussed news, blogs, whitepapers, reviews, and ebooks. And his work has featured in online media outlets from all over the world, including Al Jazeera Balkans (where he was a Multimedia Journalist), Crypto News, TechRadar Pro, and IT Pro Portal, where he has written news and features for over five years. Sead's experience also includes writing for inbound marketing, where he creates technology-based content for clients from London to Singapore. Sead is a HubSpot-certified content creator.