Toshiba is to spin off its lossmaking PC operations into a standalone (but still inhouse) company.

The electronics giant is presenting this as an attempt to restore its ailing PC biz to profitability. But equally the re-org could be seen as a tidying up exercise, which will make it easier for Toshiba to flee the PC scene if necessary.

Lately, Toshiba has been squeezed hard in the notebook market. In October the company announced expected 2003 losses for the PC operation of 21 billion yen (approx £110.7m), almost three times higher than its earlier estimate of eight billion yen.

In September, Toshiba announced a "major renovation" of the Personal Computer business. Cost-cutting measures included 500 job losses, plans to reduce the numbers of components used, and a move to increase the proportion of outsourcing from 20 per cent to 30 per cent. The company said it would also direct more sales efforts into fast-growing small and medium business markets. ®