Toshiba has updated its reorganization plans, telling shareholders it will split into two companies instead of three, as it originally planned.

The company announced in November 2021 that it intended to split into three companies. Despite being one of the most influential companies in tech at one point, Toshiba has been in decline for years, the result of missteps, mismanagement, and various scandals. Originally, the company planned on splitting into a Infrastructure Service Co., Device Co, and Toshiba, which would also maintain its shares of Kioxia Holdings Corporation (KHC) and Toshiba Tec Corporation.

The company has now announced it will separate into two companies:

• Toshiba/ Infrastructure Service Co., made up for Toshiba’s Energy Systems & Solutions, Infrastructure Systems & Solutions, Digital Solutions and Battery businesses. This entity will also retain ownership stake Kioxia Holdings Corporation.
• Device Co., made up of Toshiba’s Electronic Devices & Storage Solutions business.

“After further engaging with key stakeholders and completing the additional analysis, we determined that separating Toshiba into two standalone companies and divesting certain non-core assets is in the best long-term interests of our Company and its shareholders, customers, business partners and employees,” Satoshi Tsunakawa, Interim Chairperson, President and Chief Executive Officer of Toshiba, said. “The refined strategic reorganization plan creates two distinctive companies that are well-positioned to take advantage of their unique strengths and business cycles. We will be able to deliver these benefits while providing a clearer path to completion, reducing the associated costs, maintaining tax-free status and keeping to our stated timeframe of completing the spin-off in the second half of FY2023.”