Last week, we told you Pioneer was considering an exit from the flat panel TV market due to increasing losses. Now, it’s official: Pioneer will in fact exit the TV business by March 2010. It will also cut 10,000 jobs worldwide and direct its focus to car electronics and other home electronics businesses.
The announcement came as Pioneer posted operating and net losses as well as lower sales for its fiscal third quarter which ended December 31. The company is projecting a record net loss of about $1.44 billion for its fiscal year ending March 31. Of the 10,000 jobs that will be cut, 6,000 are full-time employees worldwide and 4,000 are temporary workers.
In a statement, Pioneer said it is exiting the TV business because “recent market conditions have changed far more than initially anticipated, and Pioneer has decided to withdraw from the display business after concluding there are no prospects for improving profitability under current conditions.”
If you’ll recall from our report last week, Pioneer ranked fifth in the U.S. plasma TV market according to DisplaySearch’s 2008 fourth-quarter market share report. The company’s 2.6% share of the market was down 4% from the previous year’s fourth quarter. Even though it is exiting the TV market, Pioneer said it will continue to provide after-sales services.
Although Pioneer acknowledges that the car electronics business has also been severely affected by lower demand, the company expects the market to recover in fiscal year 2011. As a result, Pioneer plans to shift some of its TV resources to emphasize telemantics.
Pioneer will also increase focus around its home electronics business, and will concentrate on audio products, DJ equipment, and cable TV set-top boxes. The company plans to emphasize sound and hopes to take advantage of the expertise it has developed over the years in audio technologies.
Finally, Pioneer said it is looking for ways to improve profitability for its optical disc business and is considering forming a joint venture.