Toshiba (TOSBF) is restructuring its business and will be letting go 5% of its workforce, numbering into 7,000 staff. The job cuts will come from direct layoffs and by not replacing staff who have left.
It is part of a new five-year strategy that will see it sell its struggling natural gas business in the United States and liquidate its British nuclear power division.
The announcement was responded to very positively with a 12% stock hike in Tokyo trading. Toshiba also announced its decision to buy back 40% of its own shares, and a pledge to increase dividend payouts.
Toshiba said it hopes to exit its American liquified natural gas business by March 2019, but it didn’t provide details of any possible buyers. It expects to take a 93 billion yen ($818 million) loss on the division.
It will start shutting down NuGen, its UK nuclear power operation, early next year after failing to find a buyer.
Positioning to leverage the electric revolution
Toshiba is positioning itself to leverage opportunities in the electric revolution already happening by focusing its business on energy storage and semiconductors for industries like autos and infrastructure
In recent years, Toshiba has had to divest some of its business interest to survive, including selling control of its highly regarded memory chip business to a group of investors including Apple (AAPL)
At the start of this year, Toshiba ended its disastrous foray into American nuclear power by selling Westinghouse, its bankrupt US nuclear unit, for $4.6 billion to Canadian investment firm Brookfield Business Partners.
Investors faith in Toshiba was rocked in 2015 by a huge accounting scandal, which led to the resignations of the firm’s then CEO and several board members.