Japanese media: Toshiba begins to lose talent, and the gap with Samsung is widening

Source: Content from Nikkei Chinese website, thank you.

Toshiba's internal talent is constantly draining away. Two years have passed since the financial scandal was exposed, but there is still no way out of the business crisis. Not only the semiconductor memory subsidiary to be sold, but also the centripetal force of the nuclear power department and the headquarters management department is declining. The sale negotiations of the memory business are progressing slowly in the final stage, and during this period, some employees who shoulder the future of Toshiba will resign. If this situation continues, Toshiba's road to reconstruction will become more dangerous.

The Yokkaichi factory is building a new plant, but is struggling to secure technical personnel (Yokkaichi City, Mie Prefecture)

"Are you uneasy about your current company? Do you think you can further develop your talents?" A technician in his 40s at Toshiba's Yokkaichi Memory Factory has received two calls from unfamiliar numbers since the spring of 2017. The other party is a headhunting company. The technician rejected the invitation, but said, "Since the spring, several colleagues have quietly changed jobs."

It is said that in the vicinity of the Yokkaichi Plant and the Ofuna Design and Development Office (Yokohama City), some people have seen headhunters approaching engineers on their way home from get off work. Headhunters identify targets based on the introductions of former colleagues and the content of academic publications, and come to poach outstanding Toshiba engineers.

Toshiba's total number of employees was more than 153,000 at the end of March, but it decreased by about 1,000 in the three months to the end of June. A large number of the employees who decreased were believed to have resigned in order to change jobs.

Toshiba employees' wages and bonuses continue to decrease. Other competing companies seem to have seen through Toshiba employees' dissatisfaction with the company and have offered higher salaries. Micron Technology, which acquired ELPIDA, is also strengthening the recruitment of technical personnel in order to enhance the R&D capabilities of its Hiroshima plant.

Technical staff at SanDisk, a subsidiary of Western Digital (WD), which cooperates with Toshiba in memory business, also resigned. An executive of a headhunting company said: "Not only Toshiba, but also Western Digital, which is in dispute in acquisition negotiations, are our targets for poaching."

Toshiba and South Korea's Samsung Electronics were supposed to chase each other in the NAND memory card market, but now Samsung is getting farther and farther away. From April to June 2017, Samsung's global market share of NAND memory cards was 38.3% (up 2.5 percentage points year-on-year), while Toshiba's was only 16.1% (down 3.7 percentage points year-on-year). Toshiba's competitiveness has quietly declined, and Samsung is likely to be the only one in the memory market.

Samsung has made an operating profit of more than 2 trillion yen in the past six months. With sufficient funds on hand, it has increased its R&D expenses and attracted outstanding technical personnel. Samsung is very popular with engineering students in Korea. It has also set up a huge office in Silicon Valley in the United States to attract technical personnel from various fields. Samsung is also in an advantageous position in hiring talents.

"Do you work for that high-tech company? Then please come to our company." In the summer of 2017, a unique advertisement was posted at the JR Nanbu Line station in Kawasaki City. The advertisement was for Toyota Motors, which was recruiting technicians related to autonomous driving. Toshiba's R&D center in Kawasaki City has gathered core talents, and Toyota seems to be recruiting design technicians for automotive semiconductors.

In fact, Denso established a semiconductor design company "NSITEXE" on September 1, which includes engineers from Toshiba in addition to Renesas Electronics. It is responsible for the development of new semiconductors that are equivalent to the brain of the car.

The loss of talent is not limited to the semiconductor business. Technicians from Toshiba's nuclear power business, which has incurred huge losses, are also leaving for companies such as Hitachi, Mitsubishi Heavy Industries, etc. Although Toshiba is still engaged in nuclear power business such as decommissioning in Japan, it will actually withdraw from nuclear power business overseas. These technicians have also become the target of the talent war. An increasing number of people are leaving the headquarters management departments such as business planning to join competing electromechanical companies and other industries.

Toshiba officials expressed their concerns: "If it takes too long to rebuild the business, Toshiba itself will degenerate." Toshiba recruited graduates from the electrical and electronic engineering departments of famous universities and developed a large number of products that were first launched in the world or Japan. It is still proud of being a representative group of Japanese engineers, but the failure of management has caused a loss of talent.

With the success of the sale of the memory business still unclear, employees have lost confidence in reconstruction. Although Toshiba has drawn up a blueprint to transform into a company centered on social infrastructure business, it may face the most serious talent shortage at that time.

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