The Tech Wreck Comes to Toshiba

Proving that the economic downturn caused by the tech wreck has implications
far beyond the United States, Toshiba Corp. in Tokyo said it will lose money
this year and announced a major restructuring that will cut about 18,800 jobs
around the world.

Toshiba, blaming the decline in demand for semiconductors and electronics,
said it would “reduce (its) consolidated workforce of 188,000 employees,
mostly in Japan, by 10 percent by fiscal 2003.”

The job cuts include a 10 percent reduction at the corporate headquarters.

Toshiba said it is redefining itself “as a complex corporation with
businesses in three essential domains: industry and society, the individual,
and components. Two new headquarters organizations will be established this
year to promote group unity: the procurement promotion division in October
and the Internet-ready promotion division in September.”

“With this action plan, we want to regenerate the company,” Toshiba President
Tadashi Okamura was quoted as saying at a news conference in Tokyo.

The company said it expects to lose about 115 billion yen ($957 million) for
the current fiscal year ending next March, according to Reuters reports from
Japan. Just four months ago, its guidance was a net profit of 60 billion yen.
The company said it will also consolidate or close six of its 21 domestic
plants.

Toshiba said it would take a 120 billion yen ($1 billion) charge for the
restructuring efforts for this fiscal year.

Other companies in Japan also are feeling the pinch. Fujitsu is reported to
be trimming 16,400 jobs, and NEC Corp. has said it will cut 4,000 jobs by
next March in an effort to turn around its computer chip division. Hitachi is
also expected to decide on job cuts, Japanese media reported. Matsushita
Electric Industrial Co., makers of the Panasonic brand, is trying to trim
several thousand jobs in its group through voluntary early retirement,
Reuters said.

Meanwhile, the Kyodo news service reported today that German chip maker
Infineon Technologies, a unit of a unit of Siemens AG, has confirmed it is in
talks with Toshiba on merging their memory-chip businesses to survive the
global chip market slump.