Sony to leave disc drive market, nears end of restructuring

August 25, 2012

By TAKASHI KAMIGURI/ Staff Writer

Sony Corp. will abandon the optical disc drive business, nearly completing a restructuring of money-losing divisions it initiated after suffering huge losses in fiscal 2011.

Sony Optiarc Inc., a wholly owned subsidiary that produces CD and DVD drives used in personal computers, will cease operations by March, sources said Aug. 24.

Most of the 400 or so employees at home and abroad will be let go through an early retirement program.

Sony, which posted a net loss of 457 billion yen ($5.8 billion) in fiscal 2011, has been trying to rebuild its operations by focusing on core divisions, such as games and image sensors.

It has been reviewing unprofitable divisions, selling its chemical business and scaling back a cellphone factory in Sweden.

The withdrawal from the optical disc drive business is one of the final steps in the latest round of restructuring efforts.

The company is looking to cut its global work force by 10,000 by March and has already shed thousands of jobs. It plans to ask for early retirements at sales and administrative divisions to meet that goal.

Sony Optiarc holds a 10-15 percent share of the global market for optical disc drives, with tens of billions of yen in annual sales. But it has reported operating losses due to a shrinking market for notebook computers and intensifying price competition with overseas rivals.

About 90 employees work in Japan, mainly in development and engineering, while 300 work overseas. Some employees will be reassigned to other posts.

The company was established in 2006 as a joint venture with NEC Corp. It was turned into a full Sony subsidiary in 2008.

By TAKASHI KAMIGURI/ Staff Writer
  • 1
submit to reddit
Sony Corp. President Kazuo Hirai (Asahi Shimbun file photo)

Sony Corp. President Kazuo Hirai (Asahi Shimbun file photo)

Toggle
  • Sony Corp. President Kazuo Hirai (Asahi Shimbun file photo)

More AJW