Struggling Japanese electronics maker Sanyo Electric said today it now expects to fall into the red this business year as it unveiled more job cuts and other restructuring measures amid weak sales of digital cameras and mobile phones.
Sanyo, which earlier this year issued $2.6 billion worth of shares to three banks at a deep discount to ensure its survival, said it now expects to post a 50 billion yen ($430 million) group net loss in 2006/07, its third straight year of losses.
The new forecast marks a sharp reversal from its prior estimate for a 20 billion yen profit and includes some 40 billion yen in extra restructuring steps.
"We were late to adapt to the rapid change in the mobile phone market," Koichi Maeda, a vice president at Sanyo, told a news conference.
Sanyo said it would cut an additional 2,200 jobs this business year, 1,500 of them in Japan, and slash the number of its affiliated firms by 100 to around 200 over the next three years.
Those measures come on top of a large-scale restructuring plan last year under which it has already cut 14,000 jobs, spun off its loss-making chip division and sold a stake in debt-laden Sanyo Electric Credit to reduce its debt burden.
Sanyo, whose top shareholders include the Goldman Sachs Group and Daiwa Securities SMBC, said it expected to return to profit in the next business year, forecasting net earnings of 20 billion yen, although that was a large downgrade from an earlier estimate of 62 billion yen.