Jan. 8 (Bloomberg) -- TDK Corp., the world’s largest maker of magnetic heads used in disk drives, forecast its first full- year loss in seven years as it cuts 9,000 jobs and closes factories to weather a drop in demand.

The net loss will probably be 28 billion yen ($304 million) in the year to March 31, the Tokyo-based company said today. That compares with the 25 billion yen net income TDK projected in October and profit of 6.73 billion yen, according to the median estimate of 15 analysts compiled by Bloomberg before today.

The company, which lowered its full-year earnings outlook for the second time this fiscal year to reflect lower demand, expects to book 15 billion yen in restructuring costs in the current quarter. When complete, the measures will help bolster operating income by 62.9 billion yen a year, TDK said without elaborating.

“Starting in November, demand for electronic components in all markets dropped significantly, followed by an even more precipitous fall in December,” President Takehiro Kamigama told reporters.

TDK said it will cut about 8,000 jobs overseas and 1,000 temporary workers in Japan as it closes four production facilities abroad and consolidates domestic manufacturing operations. The company will also discontinue unprofitable product lines, it said.

The company had 60,000 full-time workers as of March 2008. It didn’t say how many of the 8,000 jobs cut are full-time positions.

The full-year operating loss, or sales minus the cost of goods sold and administrative expenses, will probably be 26 billion yen, TDK said. That compares with a 35 billion yen profit forecast given in October and operating income of 87.2 billion yen a year earlier.

Revenue will decline 22 percent to 673 billion yen, exceeding the 8.2 percent drop projected earlier, TDK said.

Additional Job Cuts

TDK in October said it plans to reduce its 50,000-strong workforce in China by as much as 34 percent because of rising labor costs in the country. TDK assembles all its magnetic heads for hard-disk drives in China.

The company will reduce its temporary workers in the country by 15,000 within six months to a year through voluntary retirement, natural attrition and contract expiration, Chief Executive Officer Hajime Sawabe said at the time. TDK will also cut as many as 2,000 administrative employees within one or two years, he said. The 8,000 job cuts are in addition to those.

TDK fell 7.9 percent to close at 3,500 yen on the Tokyo Stock Exchange today, compared with a 3.9 percent drop by the benchmark Nikkei 225 Stock Average. The company made the announcement after markets closed.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net.

Last Updated: January 8, 2009 04:44 EST