Panasonic is to cut 15,000 jobs, about five per cent of its workforce, and will shut down 27 factories worldwide.
The announcement came as part of a quarterly earnings statement which showed a loss of $709m (£488m) in the fiscal third quarter, and an expected loss of $4.3bn (£2.9bn) for the year, its first negative results in six years.
"The current financial crisis that originated in the US has spread across the world and the company's outlook for the business environment has been extremely uncertain," said Panasonic in a statement.
"The company's business conditions have worsened, particularly since October, due mainly to the rapid appreciation of the yen, sluggish consumer spending worldwide and ever-intensified price competition.
"Under these severe circumstances, aiming at getting out of this difficult situation and getting growth back on original track, Panasonic is implementing initiatives for achieving further progress and strengthening management structure."
Most worrying for the technology industry is the sharp fall in component prices. Sales of semiconductors and electronic components were down by 14 per cent, indicating large cutbacks in production.
Panasonic will close 13 production facilities in Japan and 14 more around the world, although it declined to say which countries would be hit hardest. The shutdowns will be concluded by 2010.
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