Toshiba plans to cut 7,000 jobs, focus on chipmaking

Toshiba is shedding thousands of jobs in its latest attempt to turn its business around.

The Japanese conglomerate said Thursday that it was laying off 7,000 staff, or about 5% of its total workforce, as part of a new, five-year strategy. Toshiba (TOSBF) will also sell its struggling natural gas business in the United States and liquidate its British nuclear power division.

Its stock soared by more than 12% in Tokyo trading following the announcement. Investors were also buoyed by Toshiba’s decision to buy back up to 40% of its own shares, and a pledge to increase dividend payouts.

Toshiba said it hopes to exit its American liquified natural gas business by March 2019, but it didn’t provide details of any possible buyers. It expects to take a 93 billion yen ($818 million) loss on the division.

It will start shutting down NuGen, its UK nuclear power operation, early next year after failing to find a buyer.

Toshiba said the job cuts will come through a mix of direct lay offs and by not replacing staff who have left.

New focus on chipmaking and energy storage

After restructuring, Toshiba said its business will focus on areas such as energy storage and semiconductors for industries like autos and infrastructure.

The conglomerate has in recent years had to offload major assets in order to survive, including selling control of its highly regarded memory chip business to a group of investors including Apple (AAPL).

At the start of this year Toshiba ended its disastrous foray into American nuclear power by selling Westinghouse, its bankrupt US nuclear unit, for $4.6 billion to Canadian investment firm Brookfield Business Partners.

Investors faith in Toshiba was rocked in 2015 by a huge accounting scandal, which led to the resignations of the firm’s then CEO and several board members.