Toshiba's recent scandal may be the last nail in the coffin

Oct 1, 2015 13:13 GMT  ·  By

Following a rough summer for Toshiba, the Japanese giant decided that it could not continue its underperforming TV and PC businesses, while it looks for a partner in continuing its nuclear operations after the $1.3 billion scandal that led to the dismissal of its former CEO.

Following the Fukushima disaster, Toshiba provided false financial reports to the Japanese state by over-inflating the gains with more than a billion dollars in the last couple of years. When the forgery was discovered and made public, the scandal prompted the former CEO Hisao Tanaka to quit the company last month followed by eight high-level executives, in a move that saw the entire Toshiba's upper echelons step down from leading the company.

Unfortunately, this scandal seemed to be the last nail in the coffin for the company as, according to Reuters, the company may fire its entire staff involved in its TV and PC business. According to the new CEO Masashi Muromachi, "The latest accounting problems might have been driven by the fact that some of our businesses have lost earnings power. We must urgently take action in these businesses." What sort of action Muromachi is referring to isn't clearly stated, but a mass staff layoff is very possible.

Toshiba braces itself for some very rough times ahead

The new plan seems to have been drafted by a new management team, which was approved by the shareholders. According to the new CEO, the new restructuring will clearly hurt the company already affected by its poor financial condition and strong competition from Hitachi.

Stripped to the bare bones, and having contracts to respect with the Japanese government in the nuclear power business, Toshiba is currently looking for a partner since it can't support it by itself anymore.

The worst is about to come, though, as shale gas has also killed Toshiba in its investment in American nuclear unit Westinghouse Electric. As shale gas was more readily available and affordable, it generally made nuclear power uninteresting.