Toshiba is bracing itself for a torrid foreseeable future as it rues the consequences of a ¥152bn (£780m) accounting scandal after overstating profits for six years. CEO Hisao Tanaka predictably resigned and the government warned of investors' confidence in the entire country being shaken.
The company has now predicted its biggest ever annual loss – ¥550bn (£3bn, $4.5bn), as a result of costs incurred in cutting 10,600 jobs and streamlining its loss-making businesses. It will axe or relocate about 5% of its global workforce by the end of the financial year, including around 6,800 jobs in the personal computer and television consumer electronic businesses.
Regaining investor confidence from its restructuring measures is of course key, but the more concerning question that looms over the firm is how it will create growth after the scandal laid bare just how much most of its businesses were struggling. Ahead of the announcement, shares closed down 9.8% at ¥254.8, their lowest point in three years.