It’s a sad day for Pioneer and for those who love the brand. Japanese electronics maker Pioneer said it would cut 10,000 jobs as well as halt production of its flat TV business forevermore. The company also reported of a record annual loss $1.4 billion after being hit by weak demand and a strong yen.
The company, unable to keep up with larger, more efficient producers like South Korea's Samsung (News
) Electronics and Japan's Panasonic Corp, said it would withdraw from the flat TV business by March 2010.
Pioneer said it would cut 6,000 regular employees and 4,000 temporary and contract staff. Those cuts will come on top of the 5,900 jobs it already terminated between last March and December and which reduced its global workforce to 36,900.
Pioneer’s first plasma TV was introduced in 1997 and for a short while carved out a valuable niche in high-end models, according to CNBC.
"It is extremely painful to give up a business we have built up as a pioneer in the industry," President Susumu Kotani told a news conference.
Pioneer controlled just 5.9 percent of the plasma TV market in the first nine months of 2008, compared with Panasonic's (News
) 37.2 percent and Samsung's 22.8 percent, according to research firm DisplaySearch.
Other second-tier makers may also be forced out. Those struggling to gain traction in the flat-TV market include Mitsubishi Electric, JVC Kenwood Holdings and Hitachi (News
"Since Pioneer's flat TV operations are relatively small, this doesn't mean things will get better for remaining Japanese TV makers. They will still face stiff competition from overseas makers," said J.P.Morgan Securities analyst Yoshiharu Izumi.
"The trend seems to be that only big players can survive in the flat TV industry. It is getting really difficult for mid-sized makers to distinguish their products from rivals' with technological expertise alone."
Pioneer also said it was in talks with Sharp (News
) Corp to set up an optical disc joint venture, and its home electronics operations will be scaled back to handle only such products as audio equipment and cable TV set-top boxes.
The decision to pull out of flat TVs was flagged by the company on Saturday when it said it was weighing various options including all-out withdrawal and termination of in-house TV production.
Pioneer now plans to focus resources on its car navigation systems and other auto electronics products, CNBC said.
Jessica Kostek is a channel editor for TMCnet, covering VoIP, CRM, call center and wireless technologies. To read more of Jessica’s articles, please visit her columnist page.
Edited by Jessica Kostek