Japanese technology giant Sony said early Wednesday that it is forecasting a loss of $2.14 billion for the fiscal year, which will end in March 2015, according to a New York Times report.
This figure is almost five times higher than the company previously expected - about $466 million - and is an indication of its failing mobile telecommunications arm.
As a result, the electronics manufacturer has canceled its dividend payments. This is the first time the company is not paying its dividends since 1958, when it went public, according to The Associated Press.
"For more than 50 years, we always paid a dividend. The entire management takes this seriously," said Sony's president Kazuo Hirai at a press conference on Wednesday.
The company attributes the losses to a "significant change in the market and competitive environment." The once-thriving mobile phone segment of the company withered away in an increasingly competitive market dominated by Apple and Samsung, as well as Asian manufacturers.
"The Chinese smartphone market manufacturers have made great strides and are expanding outside their own market, and this has caused a shift in the pricing," Hirai said.
"Meanwhile, Apple and other manufacturers are launching strong, innovative products. The changes are rapid and dramatic," the chief executive continued.
In a press release, the company said it is shifting its focus and would instead invest more in its higher-end phones, cutting down the number of phones it designs and produces in its midrange lineup, The Independent has learned.
Sony also said it is reworking the strategy of its mobile telecommunications division to position itself for future development in mobile technology.
At the Wednesday press conference, Hirai said they "have to be in the competitive landscape in the next stage and be ready for that evolution."
Hirai mentioned that the company intends to recover by cutting costs, in addition to its planned change in strategy. The company is planning to reduce the number of its staff by 15 percent, or about 1,000 employees.
