Toshiba on Thursday announced plans to cut 7,000 jobs as part of a five-year turnaround strategy that involves selling off its U.S. natural gas business and its U.K. nuclear power business.
The company said it also would buy back 40% of its shares. The announcement sent Toshiba shares up nearly 13%.
Toshiba said the 7,000 jobs, which represent 5% of the company’s workforce, would be eliminated through a mix of layoffs and not replacing departed staffers.
Hiroyuki Fukunaga, chief executive of financial advisory firm Investrust, told Reuters that “there had been reports about a possibility of selling non-performing business and job cuts, so such moves had been expected at some point. But investors are taking heart.”
Toshiba said it would sell its U.S. liquefied gas business to China-based ENN Group at an $818 million loss. It said it hoped to complete the sale by March 2019.
“We are moving to a more stabilized business model by removing risk segments,” Toshiba CEO Nobuaki Kurumatani told reporters in Tokyo.
The company said it would begin winding up its U.K. nuclear business, NuGen, in January 2019.
Korea Electric Power, Korea’s state-run power corporation, has been in talks with Toshiba to buy a stake in NuGen. On Thursday, South Korea’s energy ministry said it would coordinate with the U.K. government to monitor the liquidation process.
Toshiba sold its bankrupt U.S. nuclear business, Westinghouse Electric, for $4.6 billion earlier this year.
Going forward, the company said its business would be focused on areas such as energy storage and semiconductors for industries like autos and infrastructure.
Toshiba had promised a share buyback of 700 billion yen ($6.14 billion) earlier this year.
Sales were down 5% for the first half of the year, the company said, but added that it expects a 14% increase in net profit for the full year.