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By Kiyoshi Takenaka and Nathan Layne

TOKYO, Feb 12 (Reuters) - Japanese electronics maker Pioneer Corp (6773.T: Quote, Profile, Research) said it would cut 10,000 jobs and pull the plug on its loss-making flat TV business, a move that could signal a further shake-out in the battered sector.

Pioneer, a niche player in the plasma TV market and one of the world's top makers of car electronics, also warned of a record annual loss of 130 billion yen ($1.4 billion) after being hit, like its rivals, by weak demand and a strong yen.

The company, unable to keep up with larger, more efficient producers like South Korea's Samsung Electronics (005930.KS: Quote, Profile, Research) and Japan's Panasonic Corp (6752.T: Quote, Profile, Research), said it would withdraw from the flat TV business by March 2010.

Pioneer launched the world's first plasma TV in 1997 and for a short while carved out a valuable niche in high-end models.

"It is extremely painful to give up a business we have built up as a pioneer in the industry," President Susumu Kotani told a news conference.

Pioneer controlled just 5.9 percent of the plasma TV market in the first nine months of 2008, compared with Panasonic's 37.2 percent and Samsung's 22.8 percent, according to research firm DisplaySearch.

Other second-tier makers may also be forced out. Those struggling to gain traction in the flat-TV market include Mitsubishi Electric (6503.T: Quote, Profile, Research), JVC Kenwood Holdings (6632.T: Quote, Profile, Research) and Hitachi Ltd (6501.T: Quote, Profile, Research).