Feb. 12 (Bloomberg) -- Pioneer Corp. will cut 10,000 jobs and close its television operations as the slump in global electronics sales forced the company to widen its annual loss forecast to a record 130 billion yen ($1.44 billion).

The company will withdraw from the TV business by March 2010 and cut 16 percent of its full-time workforce, plus 4,000 temporary positions, Tokyo-based Pioneer said today. The net loss in the year ending March 31 compares with the 78 billion yen deficit it estimated on Oct. 30. Sales will probably fall 28 percent to 560 billion yen, the company said.

Pioneer, poised for a fifth annual deficit, lost a combined 100.6 billion yen at its home electronics business, including plasma TV operations, since the year ended March 2004. The recession increases the challenge for President Susumu Kotani, who took charge in November, to restore profitability by relying on sales of car-navigation systems even as auto sales plunge.

“The share market will take the loss forecast as a message that Pioneer cannot survive by itself,” said Mitsushige Akino, who oversees $615 million of assets at Tokyo-based Ichiyoshi Investment Management Co. in Tokyo. “The consumer-electronics industry has now entered into the stage where a company on the brink of a cliff falls down.”

The company had 141.8 billion yen in total shareholders’ equity as of Dec. 31, according to a Pioneer statement.

As part of the restructuring, Pioneer will cut about 30 percent of its 30 production units worldwide, it said in a statement. The company will shut a plasma panel-making factory in the U.K. this month, and another in the U.S. in April.

Operating Loss

In the year ending March, Pioneer forecast an operating loss, or sales minus the cost of goods sold and administrative expenses, of 69 billion yen, more than three times its earlier projection of 17 billion yen. The home-electronics division, which includes TV and DVD recorders, will probably post a deficit of 52 billion yen, almost twice as big as the 27 billion yen loss estimated earlier.

The loss at the car electronics business, including car navigation systems and car audio equipment, will probably be 12.5 billion yen, a turnaround from the 10 billion yen profit Pioneer previously forecast.

“The car-related equipment market is disastrous now,” Kazuharu Miura, a Tokyo-based analyst at Daiwa Institute of Research Ltd., said before the announcement. “Car-navigation sales are bad because of slowing car sales, and demand for car audio systems are low due to weak consumer spending.”

Tumbling Auto Sales

Nissan Motor Co. Chief Executive Officer Carlos Ghosn predicted global vehicle sales will fall 14 percent this year. Sales may total 55 million units this year, and it will take at least seven years to return to the peak level of 69 million units in 2007, Ghosn said last month.

Pioneer said on May 13 it will stop making its own plasma panels by March to get out of money-losing flat-screen TV production. It ended output at two of its three plants in Japan last year and will halt operations at the remaining factory this month.

The withdrawal ends more than 25 years of TV manufacturing at Pioneer which shifted its focus from cathode-ray tube sets to developing plasma-screen models in 1991.

In February, 2004, Pioneer, then the world’s fifth-largest plasma panel maker back, agreed to buy the plasma-TV operations of NEC Corp., the sixth-largest panel maker at the time.

Outsold by LCDs

Liquid-crystal-display TVs outsold plasma sets once prices became competitive because they offer brighter picture quality. In the three months ended Dec. 31, Panasonic Corp., Samsung SDI Co., and LG Electronics Inc. had a combined share of more than 90 percent of the global plasma-screen TV market, researcher DisplaySearch said on Feb. 2.

In the three months ended Dec. 31, Pioneer posted a net loss of 26.1 billion yen, compared with 1.7 billion yen profit a year earlier. Sales in the quarter fell 38 percent from a year earlier to 131.2 billion yen, while the operating loss reached 10.7 billion yen, a turnaround from 6.9 billion yen profit a year earlier.

In the nine months ended Dec. 31, the company cut 5,850 full-time workers, taking its permanent payroll to 36,925, according to the statement. It also eliminated 4,000 temporary positions.

The shares added 0.6 percent to close at 178 yen on the Tokyo Stock Exchange, before the company’s announcement. The stock dropped 84 percent in 2008, the fifth year of declines.

To contact the reporter on this story: Hiroshi Suzuki in Tokyo at Hsuzuki5@bloomberg.net.

Last Updated: February 12, 2009 05:20 EST