Toshiba shares slump 10% after record losses and more job cuts

An independent accounting inquiry said in July that the company suffered from dysfunction in governance

Toshiba’s president, Masashi Muromachi, after announcing a £3bn loss (Reuters)

Shares in Toshiba dived 10 per cent on Monday, after the Japanese electronics and nuclear giant said it will lose a record ¥550bn (£3bn) this year and will slash another 6,800 jobs.

The news came at the end of a year in which Toshiba admitted an accounting fraud which saw it overstate profits for the past five years and the resignation of three former presidents from its board.

The group said job cuts would primarily come from its consumer division, where it will reduce production of personal computers, TVs and home appliances.

Eventually, with cuts already announced and the sale of businesses, the 10,600 jobs will be shed.

As part of its restructuring, Toshiba will sell its TV and washing machine manufacturing plant in Indonesia to Hong Kong-based TV maker Skyworth for ¥3bn.

It is also looking for investors for its healthcare business.

The company’s shares fell 10 per cent, or ¥27.7, to ¥254.8 yesterday. They have dived more than 50 per cent this year.

Announcing what it called “decisive action on structural reform”, the company said: “By implementing this plan, Toshiba would like to regain the trust of all stakeholders, including shareholders, and transform ourselves into a robust business.”

An independent accounting inquiry said in July that the company suffered from dysfunction in governance and a culture of discouraging employees from questioning their superiors.

Toshiba’s new president, Masashi Muromachi, who took over in July, has said the company will seek financial damages from former executives including the three former presidents and two of the company’s former finance directors.

Toshiba also faces legal actions from investors.

Mr Muromachi has slashed executive pay and promised to bring in more independent outside directors.

He has already sold Toshiba’s image-sensor chip operations to rival Sony, and its stakes in the Finnish lift maker Kone and Japanese medical equipment manufacturer Topcon.

Toshiba can trace its history back more than 140 years, and launched the world’s first mass-market laptop in 1985. But its once-dominant consumer electronics business has been decimated by cheaper Asian rivals.

Some of Toshiba’s problems go back to the tsunami which hit Japan in 2011. This struck the Fukushima Dai-ichi nuclear power plant, which it operates and is decommissioning with Hitachi and other companies.

The company still remains at the heart of Japan’s business community, with many former executives taking roles in the country’s government.

With cuts already announced, early retirement offers and the sale of businesses, the group will shed some 10,600 jobs.