Weak demand delivers £3.4bn Panasonic loss

Japanese electronics giant Panasonic yesterday forecast annual losses equivalent to £3.4 billion – its biggest in a decade – due to weak demand in the US and Europe and hefty restructuring costs.

The company is accelerating the pace of restructuring as it races to shake off losses at its TV division and strips out overlapping businesses after its buyout of subsidiary Sanyo.

In April, Panasonic said it would cut 17,000 jobs by March 2013, but the maker of Viera televisions and Lumix cameras said it now expects to reach its goal of slimming its workforce to 350,000 or fewer a year ahead of schedule.

Panasonic said it will stop liquid-crystal panel production at its Mobara plant near Tokyo and is cancelling plans to ship plasma-panel manufacturing equipment to Shanghai to start production there. It also slashed estimates for annual TV sales to 19 million sets from 25 million.

In another indication of the harsh business climate surrounding Japanese technology companies, electronic component maker TDK said yesterday it will cut about 11,000 jobs world-wide and Sony also said it will split its television business into three divisions to make operations more accountable as part of efforts to turn around the loss-making business.