Toshiba announced on Thursday that it plans to scale back on its consumer PC business in order to put more focus on the business-to-business sector. As part of the plans it is cutting 900 jobs globally and reducing its sales bases by more than half, reports the WSJ.
The Japanese electronics and PC maker is rapidly restructuring its struggling business-to-consumer unit. It said that it would withdraw from selected unspecified consumer markets, downsizing its international workforce by 20 per cent of its non-manufacturing PC operations head count and reducing the number of sales bases from 32 to 13. It will however, continue to operate in developed countries, where consumer sales can be linked to enterprise ones.
"The PC market is expected to see a continuing trend to modest growth rates, and these transformation measures are necessary to support the business in securing consistent profit," Toshiba wrote in a statement.
With its focus now on the business market, the company hopes to count on more steady sales, by expanding its product range which will include workstations and tablets. Toshiba also hopes to diversify its business partners, and expects that the combined efforts will grow B2B sales by over 50 per cent in the fiscal year of 2016.
The restructuring will cut fixed costs by more than ¥20 (£0.11) billion compared to the previous fiscal year ended in March. However, with its PC business performing with positive operating income in Q1 this fiscal year, the move will also subtract ¥45 (£0.25) billion from its operating profit and ¥36 (£0.20) billion from its net profit.
Toshiba is not the only company to feel the effects of declining PC sales in recent months and years, with tablets taking a grip of the consumer market. LG announced last year that it was scaling down its PC business, whilst Sony sold its VAIO division off completely. HP also felt the pinch of the PC decline we noted in 2013 with China's Lenovo seemingly one of the only PC builder companies to avoid significant negative impacts from the trend.
Toshiba's earnings guidance for the current year has not been altered. It is projecting a ¥330 billion operating profit and a ¥120 billion net profit.
