Reports say Toshiba is planning to slash roughly 7,000 jobs over the next five years as part of a drive to get back on track

Tokyo (AFP) - Struggling Japanese engineering firm Toshiba downgraded its annual forecasts Thursday as it pulls out of foreign investments as part of a broad restructuring programme that reports said would see thousands laid off.

The downgrade stems from expected losses as the company withdraws from a US-based liquid natural gas business and a nuclear plant business in Britain.

Toshiba is going through a sweeping reform effort to revive itself following the disastrous acquisition of US nuclear energy firm Westinghouse, which racked up billions of dollars in losses before being placed under bankruptcy protection.

For the year to March 2019, the firm expected a net profit of 920 billion yen ($8.1 billion), down from an earlier projection for 1,070 billion yen.

The annual operating profit outlook is now 60 billion yen, down from a previous 70 billion yen forecast, while sales estimates were kept at 3,600 billion yen.

Still, the firm’s share price soared almost 10 percent in afternoon trade.

To stay afloat, the cash-strapped group sold its lucrative chip business for $21 billion to K.K. Pangea, a special-purpose company controlled by a consortium led by US investor Bain Capital.

The firm is taking further measures to return to health, with local media reporting that it planned to cut roughly 7,000 jobs over the next five years.

The sales of the memory unit continued to boost Toshiba’s net profit, although the firm’s operations remained under pressure.

For the six months to September, the company’s net profit stood at 1.08 trillion yen, reversing a net loss of 49.8 billion yen seen a year earlier.

But its six-month operating profit fell to 6.98 billion yen, more than 80 percent down from a year ago when the company took emergency cost-cutting steps such as dramatic reduction of seasonal bonuses to its workers.

The first-half sales came to 1.78 trillion yen, down 5.1 percent from a year ago.

The firm said it planned to release a new business plan later Thursday.