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Panasonic warns of $4.2 billion loss, to cut 15,000 jobs

(Agencies)
Updated: 2009-02-04 17:30

TOKYO -- Japan's Panasonic Corp, 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.

Men are reflected in a sign at Panasonic Corp's showroom in Tokyo February 4, 2009. [Agencies]

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 Corp 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 Ltd, which are benefiting from a softer won currency.

"Sales fell in all our business segments in the third quarter. 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 Inc in the plasma TV market, revised its forecast for the full year to March 31 to a loss of 380 billion yen ($4.2 billion) from previous guidance for a 30 billion yen profit.

The new loss forecast, which is slightly bigger than media reports earlier this week predicting a loss of 350 billion yen, incorporates 345 billion yen in restructuring charges. It cut its sales estimate by 9 percent to 7.75 trillion yen.

Panasonic, formerly known as Matsushita Electric, said it would close 27 manufacturing sites, and cut 15,000 jobs, or 5 percent of its global workforce of about 300,000.

The company posted a net loss of 63.1 billion yen ($704 million) for October-December versus a year-earlier profit of 115.2 billion yen.

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 percent at 1,092 yen, underperforming the electrical machinery sub-index, which rose 3.5 percent.