Toshiba Cuts 900 PC Jobs, Pares Consumer Sales to Focus on Businesses

Toshiba plans to cut 900 jobs from its PC business unit, or 20 percent of that operation’s staff, as part of a wide-reaching overhaul to withdraw from certain consumer markets and focus on business sales.

The Japanese vendor said the PC division cuts will save it some $183 million in fixed costs for FY2013. Toshiba, which didn’t detail the consumer markets from which it intends to retreat, also said it will alter its business model to reduce its sales offices globally to 13 from its current 32 in FY2014, scale back efforts in unprofitable areas, cut procurement and distribution costs, and relocate some corporate functions outside of Japan.

The restructuring may prove a bonanza for Toshiba’s channel partners, which, as a group, the vendor plans to leverage to reach more business customers.

In pointing out that its PC business posted an operating profit in Q1, Toshiba said the restructuring would lift some $415 million from its operating profit and subtract $330 million from its net income. Still, the moves are justified, Toshiba said, because the trend line for PCs is confined to “modest growth rates, and these transformation measures are necessary to support the business in securing consistent profit.”

Toshiba said the move to concentrate on B2B sales, including developing new workstations and tablets, is aimed at uncovering new customers and “securing consistent profit in the future." Resources Toshiba previously allocated for B2C sales in what proved to be difficult-to-mine markets it now will dedicate to developed countries, the vendor said, where it can combine efforts with its B2B initiative.

The company said its goal is to grow its B2B sales to where, as a line item, it accounts for more than 50 percent Toshiba's overall IT-related revenue by fiscal 2016.

Toshiba isn’t typically mentioned among IT vendors engaged in the Internet of Things (IoT), but the vendor said it intends to combine its PC technologies, including BIOS, security, wireless and high-density mounting, to build IoT-related products and services in areas such as social infrastructure, the cloud, health care and home appliances.

The idea, Toshiba said, is to craft a business model not dependent on sales of PCs alone but to capitalize on its core technologies to deliver services and solutions to businesses.