Sony today said it would suffer far bigger losses than anticipated this year in a dramatic decline in fortunes that underlines the struggle facing major Japanese exporters.
The consumer electronics firm said it expected an operating loss - its first for 14 years - of ¥260bn (£2.08bn) by the end of March. This time last year Sony was celebrating an apparent return to financial health with profits of ¥475.3bn.
The firm said it expected net losses of ¥150bn, compared with an initial forecast of ¥150bn profit.
Though reports of an impending cut in Sony's earnings outlook have been circulating for days, the scale of the revision shocked industry analysts.
It had previously forecast a profit of ¥200bn, while analysts had predicted much smaller losses of around ¥9bn.
Sony executives are due to announce an emergency restructuring plan this evening that may include the closure of one of its two TV plants in Japan, with the loss of around 1,000 full-time jobs.
Reports said the company would shed a further 1,000 regular staff as it scales down its manufacturing operations, as well as cutting executive and managerial bonuses.
The reported measures come weeks after the firm said it would cut 16,000 jobs worldwide and close factories in an attempt to cut costs by $1.1bn (£793m) a year.
Recent reports suggest that Sony's chief executive officer, Sir Howard Stringer, has been locked in battle with colleagues who do not share his zeal for cost cutting.
But experts said that slashing domestic production alone would fail to lift Sony's fortunes as long as more fundamental problems were left unaddressed.
"[Sony's] business model and operational issues account for 80-90% of Sony's poor earnings," said Eiichi Katayama, a senior analyst at Nomura Securities. "Domestic production costs are a concern but this move is not something that would bring it back to the black or cut losses in half.
"Sony has to consider ways to lower fixed costs not only for its TV business but for the whole company. It will have to start cutting development costs in addition to production costs."
The weak performance suffered by Sony is being replicated throughout the Japanese export sector as consumer interest cools in the US and Europe, prices fall and the yen continues to gain on major currencies.
It came as government data released today showed that Japanese exports fell a record 35% in December from a year earlier, surpassing the 26.7% drop seen last November.