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Job losses may follow Toshiba DRAM output cuts

Company attempts to rein in chip division's losses

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Toshiba's plan to shut down memory production at its Japanese Fab 1 plant to cut output by 25 per cent could be accompanied by staff reductions, the company has warned.

The threat followed an admission that Toshiba's semiconductor operation will post a loss for the first six months of its financial year. The loss is being pinned on falling DRAM prices, on the back of which the company reckons it won't meet its annual profits target of ¥50 billion ($416 million).

This time last year, Toshiba made an operating profit of ¥72 billion selling chips.

Now, however, "losses at our computer-memory chip business are extremely large", Takeshi Nakagawa, president of Toshiba's semiconductor business, told Bloomberg this morning.

Getting rid of workers is the answer, though whether by sackings or early retirement schemes has yet to be decided, said Nakagawa. ®

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