Toshiba Corp. share price up, speeds up the restructuring of its PC business, cuts 900 jobs

Toshiba Corp. revealed in an official statement today that it plans to speed up the restructuring of its PC business in order to become more concentrated on the business-to-business field. The Japan-based company also shared that it plans to leave certain consumer markets.

“The PC market is expected to see a continuing trend to modest growth rates, and these transformation measures are necessary to support the business in securing consistent profit,” Toshiba said in a statement, which was cited by the Wall Street Journal.

The company said it plans to cut 900 jobs in its global PC business, which equals to about 20% of the staff in the PC operations division, excluding the manufacturing segment.

According to Toshibas statement, restructuring costs are expected to reduce operating profit by ¥45 billion ($414 million) and net profit by ¥36 billion. The Japanese company, however, did not alter its earnings forecast for the current fiscal year ending March, as its electricity and other units better-than-expected earnings should help compensate for the impact.

Toshiba forecast an operating profit estimated to ¥330 billion and a net profit of ¥120 billion for the current financial year.

The Japan-based company said that the workforce reduction will cut fixed expenses by more than ¥20 billion in comparison to the previous financial year. In addition, it revealed that it will cut the number of sales bases worldwide from 32 to 13 over the current fiscal year. Toshiba did not say which consumer markets it would leave.

As reported by PCWorld, a spokeswoman for the company wrote in an email when asked about the reasons behind the move: “The main reason is to secure consistent profit. Toshiba does not plan to withdraw from the PC business as there are cases in which technologies developed for PC have been transferred to different business areas.”

Toshiba Corp. rose by 0.82% on Thursday in Tokyo to close at ¥494.50 per share, marking a one-year change of +20.61%. The company is valued at ¥2.08 trillion. According to the Financial Times, the 18 analysts offering 12-month price targets for Toshiba Corp. have a median target of ¥595.00, with a high estimate of ¥700.00 and a low estimate of ¥445.00. The median estimate represents a 21.30% increase from the previous close of ¥490.50.