Japan’s embattled consumer electronics sector was dealt another blow on Thursday when Pioneer more than trebled its annual net loss forecast and said it would cut an additional 600 jobs.
The news came as Moody’s Investors Service, the ratings agency, cut its long-term ratings on Sony, citing concerns over its cashflow and profitability, and Sanyo Electric was holding talks with Goldman Sachs over the sale of its financial unit.
Pioneer said that because of asset impairment losses and restructuring costs it had widened its net loss forecast to a record Y87bn ($719m) from Y24bn.
Pioneer’s problems, and those of its peers, highlight the challenges facing some Japanese consumer electronics makers amid falling prices for products such as flat-panel TVs and DVD recorders.
Sony, Sanyo and JVC are also forecasting net losses for the current business year.
Only Sharp and Matsushita are proving the winners in the ongoing shake-up affecting the industry.
Pioneer said it would cut its domestic workforce by 600 to reap cost savings of Y5bn. The job losses come on top of Pioneer’s previously announced plan to cut nearly 2,000 jobs overseas.
Pioneer will also delist its shares from stock exchanges in New York, Amsterdam and Osaka, retaining only its Tokyo listing.
The reversal of Pioneer’s fortunes comes a year after it acquired NEC’s loss-making plasma display business. Pioneer said yesterday it would rein back its plasma display panel output capacity and concentrate on selling finished Pioneer-branded goods.
It will also end production of low-end DVD recorders and VCR-combo DVD recorders, and shift its focus to making slim DVD drives for notebook PCs, which have a higher margin.
The company said it would also revamp its management system to improve efficiencies and communication.
Separately, Moody’s said it was cutting its long-term ratings on Sony to A2 from A1, on concern the group may take longer than expected to recover profitability.
Goldman Sachs, meanwhile, is planning to invest about Y33.2bn in Sanyo Electric Credit, according to people close to the talks.
Both Sanyo and Goldman declined to comment.