Toshiba Corp. is embarking on a revamp that will leave the one-time technology pioneer a shadow of its former self. An accounting scandal has left the conglomerate in tatters, facing record losses, thousands of job cuts and potential spinoffs that may include the consumer electronics unit that made it a global player.
President Masashi Muromachi is being forced to make tough decisions after the company projected a loss of ¥550 billion for this fiscal year. Toshiba's bond ratings were cut to junk, with restructuring costs seen outpacing previous estimates and dragging on earnings.
A household name known for making the first DVD player and the first popular laptop computer, Toshiba has clung to legacy consumer-electronics businesses that are wilting under pressure from Samsung Electronics Co. and Chinese manufacturers. As Panasonic Corp., Mitsubishi Electric Corp. and other Japan-based competitors shift away from domestic products, Toshiba has lagged behind, relying on profit from semiconductors and power generation to subsidize its TV and computer units.