Toshiba to shed troubled assets, cut 7,000 jobs as part of new five-year strategy

Toshiba Corp is liquidating its British nuclear power unit and selling its US liquefied natural gas (LNG) business, as the once-mighty industrial conglomerate seeks to unload troubled assets and regain investors’ confidence.

The plans are part of a new five-year business strategy Toshiba announced on Thursday, which also included 7,000 job cuts, or 5 per cent of its workforce, over five years, reports Reuters.

The company’s shares surged as much as 13.7 per cent to near two-year highs after the announcement, helped also by a much anticipated move to repurchase up to 40 per cent of its own shares starting Friday. They closed 12.7 per cent higher.

Toshiba has been trying to win back the market’s trust after a 2015 accounting scandal uncovered widespread irregularities at the laptops-to-nuclear conglomerate for years.

The scandal forced it to recognise huge cost overruns at now-bankrupt US nuclear unit Westinghouse, prompting it to sell its prized memory chip unit earlier this year to a consortium led by US private equity firm Bain Capital and leaving it with few growth businesses.

Toshiba had already promised a share buyback of 700 billion yen earlier this year, but the timing had been undecided. Its announcement on Thursday appeared to outweigh a weaker profit forecast - the company said it now expects a full-year operating profit of 60 billion yen rather than a previous estimate of 70 billion yen.