Toshiba said on Monday it would cut 50 percent of staff in its TV unit and cease production at two of its three overseas factories before the end of this fiscal year.
The moves are part of the company's planned structural reform of its visual products business toward improving profitability.
Toshiba will focus on emerging markets including Asia, the Middle East and Africa, where growth in demand is expected. In addition, Toshiba will end sales in unprofitable regions.
The compay will also integrate its overseas TV manufacturing facilities, from three to one, excluding joint venture facilities, within this fiscal year. The company did not say which two of its three factories in China, Indonesia and Poland it would close.
This measure will allow the company to increase products from original design manufacturers (ODMs) in the global market from the current rate of about 40% to 70% by FY 2014. The company further plans to reduce fixed costs and improve productivity by reducing the number of ODMs and models and by integrating manufacturing facilities.
The Japanese company will allocate resources to large screen Ultra HD (4K) LCD TVs, where growing demand is expected, to differentiated functions for viewing and recording. The company will also concentrate resources on strengthening cloud services, which are expected to enhance linkage between digital products and between digital products and home appliances. The company will also reinforce development of visual products for business applications, including digital signage, another area where demand is growing.
Through these measures, including reallocating resources in Japan, integration of overseas manufacturing facilities and reform of overseas sales operations, Toshiba will adjust its visual products business global consolidated headcount in this fiscal year, by approximately 50% from FY2012, to 3,000 people.
Toshiba will also separate the visual products business from its in-house Digital Products & Services Company and merge it with Toshiba Home Appliances Corporation, a consolidated subsidiary that oversees the home appliances business. Toshiba plans to establish Toshiba Consumer Electronics Corporation (provisional name) to operate both businesses.
Toshiba also aims to improve efficiency in sales and after-service operations in the Japanese market, to strengthen and expand sales in overseas markets, primarily emerging economies, and to promote investments to develop new business fields including smart home appliances, by integrating operations and promoting use of shared resources.
Going forward, Toshiba aims to see profit in its visual products business in the second half of this fiscal year.