In yet another sign of the deep slowdown in the consumer electronics business, Panasonic has announced it expects to post a net loss of $4.2 billion for the fiscal year ending March 31, rather than the $330 million profit it initially forecast roughly two months ago. In response, the Japanese manufacturer said it plans to close 27 factories and scrap 15,000 jobs worldwide by March 2010.
This is the first annual loss Panasonic has reported in six years. The maker of Viera flat panel TVs and Lumix digital cameras said its business was hurt by the rising value of the yen, which makes its products less competitive against rival manufacturers and resulted in a steep sales drop. In a symbolic gesture, the company's top executives will take a pay cut in February, ranging from 5% for senior managers to as much as 20% for directors. Panasonic is just the latest Japanese business to announce big losses and job cuts, following similar reductions at NEC, Hitachi, Sony and Toshiba.