Sagging demand for semiconductors and the Asian economic crisis have taken their toll on Japanese electronics giant Toshiba, which has issued a profits warning, and outlined job cuts.
The company said it will post a net loss of Y25 billion for the first half of 1998. The forecast is sharply down from Toshiba's previous projections of a Y40 billion net profit.
"It will be very hard to post a profit this year due to the large loss expected in the first half," said Toshiba president, Taizo Nishimuro.
The new figures reflect a continued weakening of Toshiba's profits, which slid 85 per cent last year.
Profits for the year ending 31 March 1999, are expected to be around Y70 billion, compared to Y82.29 billion the previous year.
Toshiba said the new forecasts reflect "price erosion in 64Mbit Dram as well as sluggish demand for semiconductors for consumer products due to the Asian economic crisis".
Price increases in PC components, including colour display tubes, LCDs and peripherals, have also affected company's profits, Toshiba said.
For the past nine months Toshiba has been working hard to trim down and improve operation efficiency. In January, the company reorganised its activities, which range from washing machines to notebook computers, into four divisions. It also cut its board from 33 directors to 12, while executive salaries are to be slashed by 20 per cent from October.
Jobs will axed with 2,500 to go by the end of the year. An additional 4,000 posts will also be targeted by the end of March 2000, from today?s workforce of around 66,500.
Despite the gloomy news, Nishimura, remained optimistic. He claimed profits would rise in the second half of the fiscal year, driven by strong demand for fast memory chips and government spending on information systems.
Insecticides based on sulfoxaflor might be as bad for bees as neonicotinoids
Intel teases forthcoming new graphics card accompanied by the text "We will set our graphics free"
Think your password manager is completely secure? Think again...
ARM plans 7nm 'Deimos' for 2019 and 5nm and 7nm 'Hercules' for 2020