Tokyo, Japan — Kuro plasma TVs were part of Pioneer’s big marketing campaign at CEDIA EXPO in September, but now it appears the company is pulling the plug on its entire flat-panel TV business after the economic downturn devestated that part of its business. The company, according to reports, plans to immediately end in-house development of video products and by March 2010 will close down its TV business altogether.
The world’s fourth-largest maker of plasma televisions made its announcement on February 12 that it’s pulling the plug on its flat-panel TVs, joing Hitachi, NEC, Fujitsu, and Toshiba, which have restructured or eliminated money-losing electronics divisions.
Pioneer, which already made a big push with its new high-end speaker lines at both CEDIA and CES, will re-focus on audio equipment and set-top boxes as well as car navigation technology. The shift will force the company to eliminate 6,000, or 16 percent, of its 36,900 full-time staff, and to let go another 4,000 temp and contract workers this year.
“It hurts that we have to give up on a business that we were leaders in,” Pioneer President Susumu Kotani told reporters. “But market conditions changed too suddenly, and we couldn’t stay profitable.”
In the October-December quarter, the company reported an operating loss of $119 million, from a $77 million gain in the same quarter last year, and sales fell 38 percent to $1.46 billion. Its net loss reached $290 million, from a $19 million profit last year. The company now expects operating earnings to swing to a loss of $767 million and sales to total $6.2 billion for the year ending in March. (The company’s figures from last year were calculated using U.S. accounting standards; this year’s will stick to Japanese rules.) Pioneer’s hope is that taking a hit now will speed its recovery. “My number-one task is to carry out reforms so we can soon be profitable,” Kotani said.
Last spring, Pioneer announced that it would stop making its own plasma panels to save billions of dollars on factory and equipment spending, leaving just three plasma panel manufacturers. Later Pioneer signed a deal to buy panels from Japanese rival Panasonic. But by October of last year, the market turned south: In the fourth quarter alone, Pioneer’s revenues from plasma TVs fell 29 percent, according to DisplaySearch.