Photo/IllutrationToshiba Corp.'s headquarters in Tokyo's Minato Ward (Asahi Shimbun file photo)

Toshiba Corp. plans to sell off foreign subsidiaries and encourage around 1,400 employees to take early retirement as part of a new five-year business plan announced Nov. 8.

The strategy for the period through March 2024 was made necessary by Toshiba's decision to spin off its highly lucrative semiconductor business to dig itself out of a financial morass from massive losses stemming from its failed nuclear power operations in the United States.

The streamlining of operations is expected to expose more of the company's bad business decisions overseas in the past.

Its money-losing liquefied natural gas operation in the United States will be sold to a Chinese company, while a nuclear power subsidiary in Britain will be broken up as part of Toshiba's move to remove itself from further construction of nuclear plants there.

Under the new business plan, about 7,000 Toshiba group company employees, or 5 percent of the workforce, will be cut. While most will come in the form of natural attrition as workers reach mandatory retirement age, there are also plans to implement an early retirement program at subsidiaries in the energy equipment and digital-related equipment sectors.

Toshiba is forecasting sales of 4 trillion yen ($35.4 billion) for the fiscal year ending in March 2024, the final year of the five-year plan. That figure is about 10 percent higher than the sales estimate for the current fiscal year.

Toshiba has also set an operating profit goal of 400 billion yen for March 2024, more than six times the predicted figure for the current fiscal year.

The company hopes to shift the base of its profit centers to social infrastructure projects, such as non-nuclear power plants and building equipment.

One area of interest is the use of artificial intelligence and information technology for inspections and repairs.

Although Toshiba Memory, the semiconductor subsidiary, had accounted for about 90 percent of Toshiba's operating profits, the parent company was forced to sell it off to cover the huge losses from its failed nuclear power plant business in the United States.

While Toshiba managed to avert financial disaster by selling the subsidiary, it still faces the major task of fostering new profit-generating units.

(This article was written by Hisashi Naito and Keiichi Kitagawa.)