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Panasonic warns of loss and plans to cut 15,000 jobs

  Japan’s Panasonic, the world’s No.1 plasma TV maker warned it would post an annual loss of $4.2 billion and said it would cut 15,000 jobs and close plants as it battles a slump in demand and a stronger yen.

The maker of Viera flat TVs and Lumix digital cameras is struggling with slowing sales, the growing costs of plant closures and other restructuring moves, and a steep rise in the yen, which cuts into exporters’ overseas revenues. It joins other Japanese consumer electronics makers such as Sony in projecting a full-year loss.

A stronger yen also makes Japanese electronics less competitive against rival goods from South Korean firms such as Samsung Electronics Co, which are benefiting from a softer won currency. “Sales fell in all our business segments in the Q3. We expect sharper sales declines in this quarter, and profits are likely to shrink in every segment,” Panasonic director Makoto Uenoyama told a news conference.

Panasonic, which ranks ahead of Samsung and LG Electronics in the plasma TV market, revised its forecast for the full year to March 31 to a loss of ¥380 billion ($4.26 billion) from previous guidance for a ¥30 billion profit. The new loss forecast, which is slightly bigger than media reports earlier this week predicting a loss of ¥350 billion, incorporates ¥345 billion in restructuring charges. It cut its sales estimate by 9% to ¥7.75 trillion.

Panasonic, formerly known as Matsushita Electric, said it would close 27 manufacturing sites, and cut 15,000 jobs, or 5% of its global workforce of about 300,000. The company posted a net loss of ¥63.1 billion for October-December versus a year-earlier profit of ¥115.2 billion.

On top of dwindling sales of consumer gadgets, Panasonic’s factory automation equipment operations have come under pressure as companies worldwide cut production and spending on manufacturing tools. Ahead of the results, shares in Panasonic closed up 1% at ¥1,092, underperforming the electrical machinery sub-index, which rose 3.5%. (Reuters)