TOKYO- Japanese electronics firm Toshiba Monday announced plans to slash its TV division staff strength by half to 3,000 as it implements structural reform of its visual products business, including LCD TVs, toward improving profitability and strengthening foundations of the business.
On anvil are plans to reduce fixed costs and improve productivity by reducing the number of original design manufacturers (ODMs) and models and by integrating manufacturing facilities.
Toshiba will focus on emerging markets including Asia, the Middle East and Africa, where growth in demand is expected, while withdrawing from unprofitable regions.
The restructuring will see Toshiba integrate its overseas TV manufacturing facilities, from three to one, excluding joint venture facilities, within this fiscal year, allowing it to . increase products from ODMs in the global market from the current rate of about 40% to 70% by FY 2014, the company stated.
"Toshiba will adjust its visual products business global consolidated headcount in this fiscal year, by approximately 50% from FY2012, to 3,000 people," the company stated adding that it 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, while reinforcing 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, the Japanese company hopes to offset impact of slowing demand, falling prices and increased competition.
The company's digital products division, which includes TV manufacturing, saw its losses widen to 16.3bn yen ($166million), in the financial year to 31 March, compared with a loss of 3.3billion yen a year earlier.
Toshiba, which makes the Regza brand TV sets, said in a statement that the changes were aimed "toward improving profitability and strengthening foundations of the business".
The firm said it would separate the TV business from its 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. It will finalize details, including organization and operations, and plans to establish the new company in the fiscal half starting October 1, through procedures in accordance with Japan's Companies Act.
Through improved efficiency in sales and after-service operations in the Japanese market, the company plans 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 through continued review and reform of business processes and operations.
Toshiba said that it would move resources towards making large screen ultra high-definition (HD) 4K LCD TVs "where growing demand is expected".
Large ultra high-definition (HD) screen offers four times the amount of detail as 1080p high-definition TV, as an area of potential growth. Panasonic and South Korea's LG are among the manufacturers that have launched ultra HD TVs.
Toshiba's move to focus on the technology is in tandem with Japan's efforts to become the first country to broadcast 4K programming over satellite from 2014, in time for the football World Cup, reported BBC News.
Earlier this year, a Japanese telecoms company said that it was carrying out tests to try to prove that 4K-resolution video could be streamed over the internet to television set-top boxes.