Pioneer is throwing in the towel on its flat-screen TV business after four straight years of loss and little prospect of making any money in the current year.
The company, which is already in the middle of a restructuring, has decided to end all development of televisions and withdraw from the market by March next year, it said on Thursday while announcing quarterly results.
Going forward Pioneer said there are “no prospects for improving profitability” of its TV and display business and it would concentrate its home electronics operations on the audio, DJ equipment, and cable TV set-top box sectors.
However, the company’s main focus will be elsewhere.
“Pioneer aims to transform itself into an enterprise centered on the car electronics business,” the company said in a statement.
Pioneer last made an annual operating profit in its home electronics business in the 2004 fiscal year, which was the period from April 2003 to March 2004. It reported a slim profit of ¥4 billion yen (US$44 million) but in subsequent years posted loss after loss. In the first nine months of this year, the home electronics business racked up an operating loss of ¥24 billion.
The restructuring efforts announced on Thursday will see Pioneer reduce by one third its 30 production companies worldwide, overhaul its sales operations and resize its headquarters and research and development operations. Through these measures the company will cut around 6,000 full-time jobs and an additional 4,000 temporary staff. It revealed that executive pay has been cut since July and from February will be reduced by between 20 percent and 50 percent until March 2011. The company will also not pay bonuses to executives.
In the last three months of the year, the company reported a net loss of ¥26 billion as sales dropped 38 percent compared to the same period in 2007 to ¥131 billion. Revenue at its home electronics business, which includes its TV operations, was almost halved compared to 2007.
Pioneer also revised its earnings outlook for the full fiscal year to the end of March. It now expects to record a net loss of ¥130 billion, worse than the ¥78 billion previously forecast and well down on the ¥18 billion loss it recorded last year. Sales are expected to be ¥560 billion against ¥774 billion last year.