Japanese major Pioneer to slash 10,000 jobs, exit TV business on record losses

12 February 2009

Japanese electronics maker Pioneer said Thursday 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 130 billion yen ($1.44 billion) annual loss. The net loss in the year ending 31 March compares with the 78 billion yen deficit it estimated on 30 October. Sales will probably fall 28 per cent to 560 billion yen, the company said.

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 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.

The company will withdraw from the TV business by March 2010 and cut 16 per cent of its full-time workforce, plus 4,000 temporary positions, Tokyo-based Pioneer said today. 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. Pioneer added it would be reducing directors' salaries by between 20 per cent and 50 per cent until 2011 and that no bonuses will be paid.

"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."

The withdrawal ends more than 25 years of TV manufacturing at Pioneer, which shifted its focus from cathode-ray tube sets to developing plasma-screen models in 1991. In February, 2004, Pioneer, then the world's fifth-largest plasma panel maker back, agreed to buy the plasma-TV operations of NEC Corp., the sixth-largest panel maker at the time.

Pioneer held a 5.9 per cent share in the plasma TV market in the first nine months of 2008, a long way behind Panasonic Corp's 37.2 per cent, Samsung Electronics Co Ltd's 22.8 per cent and LG Electronics Inc's 15.5 per cent, according to research firm DisplaySearch.