Japanese electronics maker Pioneer Corp said it would pull the plug on its loss-making flat TV business and cut an additional 10,000 jobs as it heads for a record $1.4 billion annual loss.
Pioneer, a niche player in the flat TV market and one of the world’s largest makers of car electronics, has suffered along with other Japanese electronics companies due to the slowing global economy and strong yen.
The company said it would withdraw from the flat TV business by March 2010 and consider an alliance in optical disks as part of a restructuring that will put greater focus on its car electronics business.
“It is extremely painful to give up a business we have built up as a pioneer in the industry,” President Susumu Kotani told a news conference. “The market’s fluctuations have been outside the realm of our expectations and we came to the conclusion that we cannot expect profitability to improve.”
Pioneer held a 5.9% share in the plasma TV market in the first nine months of 2008, a long way behind Panasonic Corp’s 37.2%, Samsung Electronics Co Ltd’s 22.8% and LG Electronics Inc’s 15.5%, according to research firm DisplaySearch.
Pioneer said it would cut 6,000 regular employees and 4,000 temporary and contract staff. Those cuts will come on top of the 5,900 jobs already shed between March and December of last year, which brought its global workforce down to 36,900.
The decision to pull out of flat TVs was flagged by the company on Saturday when it said it was weighing various options including all-out withdrawal and termination of in-house TV production.
Pioneer also warned on Thursday that it now expected to post a group net loss of ¥130 billion ($1.44 billion) for the year to March 31, compared with its prior forecast for a loss of ¥78 billion.
It cut its sales forecast by 20%. Prior to the announcement, shares of Pioneer closed up 0.6% at ¥178. The benchmark Nikkei average lost 3%. (Reuters)