Panasonichas reported a $5.4 billion loss, which is considered to be its biggest annual loss in 10 years. Panasonic had bought Sanyo (a major electronics company headquartered in Japan) one year ago for more than $6 billion, and recently it announced that it was going through a major issue in restructuring its TV and chip production.
“Panasonic is having a really hard time because the company has to work on two restructuring plans at the same time, one is Sanyo and another one is downsizing their TV business," said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo.
Panasonic, Japan’s biggest manufacturer of appliances has to cut its TV production target from 25 million units to 19 million units, even though there was heavy competition coming from Samsung and LG. The company will also reduce its Plasma TV panel’s production by 48 per cent.
"We've sought measures to solve deficits at the TV unit since 2008 but none brought a result that we anticipated," President Fumio Ohtsubo told reporters in Tokyo.
Analyst are claiming that, Panasonic, which has already cut down its staff strength in Australia might further downsize by another 17,000 staffs and concentrate more on solar panels and rechargeable batteries. Reports from Bloomberg came that shares of Panasonic in Tokyo has declined by 30 per cent in 2011, whereas its rival Samsung jumped up by two per cent. Sony was also reported to face a decline of 43 per cent in the share market.
The depreciation in the value of Yen has been a major contributor to the high loss for Panasonic. After the World War II, the value of Yen had stayed quite high but now since its value has decreased, it has been affecting the overseas sales of Panasonic products. The recent flood in Thailand is another contributor to Panasonic loss.
Panasonic has also informed that it will be shifting the base of Sanyo from Osaka to Singapore, and it will start focusing on manufacturing more energy-related products. The company expects to generate revenues from its TV and chips business in the next fiscal year.