Panasonic has published a doom-laden financial forecast this morning, with the Japanese corporation predicting losses of nearly £6 billion for the current financial year.
Despite previous forecasts suggesting a healthy 50 billion yen (£390 million) profit for the company, poor sales have put fresh calculations at a sizeable 765 billion yen net loss, equating to just over £5.9 billion.
Panasonic cites severe global competition as hitting sales figures, while uncertainty from the European financial crisis and a slowdown of the Asian economic expansion have also had a negative impact, the firm says.
The television specialist also reports a weak Japanese market for flat-panel TVs, helping to bring domestic sales down by 11 per cent from a year ago. Overseas sales have declined too, with a 14 per cent reduction on 2011.
Panasonic has also announced it will pull out of the European smartphone market in March 2013, around a year after the launch of Eluga, the company's first handset released outside Japan since 2005. Android 4.0.4 Ice Cream Sandwich started rolling out to Eluga owners just yesterday.
This move will form a part of a larger restructuring effort within the company.
A brand new company, which will be dedicated exclusively to handsets, is to be fashioned. This is currently rolled up with Panasonic's base station business, but the two will be divided.
Management salaries will be cut, with the firm's president and chairman set to suffer 40 per cent reductions. Other execs will be subject to 20 per cent losses.
Additionally, Panasonic's factories are to be consolidated, with three of its domestic workshops in line to incorporate the other three.