Mr. Universal's Blog

After a crushing financial report that showed the company posting record losses for 2008, Japanese electronics giant Sony continues to restructure several key elements of their most high-profile product's supply and production lines. Of primary interest would be their third-generation PlayStation console, which despite a sales increase from 2007 to 2008 was unable to help the company thwart its first annual net loss in 14 years

To help combat rising costs, Sony plans to cut its number of parts suppliers in half, which would reduce purchasing costs by $5.3 billion US dollars. This would bring the current number of parts suppliers down from 2,500 to 1,200 by next year, reducing redundancy and communications problems between the various suppliers. The measure comes outside of the company's previously announced staff reduction efforts, which would see roughly 8,000 of its full-time staff as well as another 8,000 of its temporary workers.

The plan is part of a larger global iniative, spearheaded by Chief Executive Howard Stringer, as an effort to combat rising costs in manufacturing and decrease projected losses the company is planning to incur over the next operating year.

Says company spokeswoman Mami Imada on the planned price-cutting measures:

"The prices of digital home appliances have been declining by 15 percent to 20 percent every year lately. Unless we cut costs, we cannot hope to survive the price competition,"

Since becoming the first non-Japanese CEO of Sony, the Welsh/American Howard Stringer has overseen a fundamental shift in demand for high-end electronics, as well as a global recession that has hit many key players in the industry hard. Many have criticized Stringer's response to the company's chief rivals, particularly those within its videogame division, with some questioning the security of his position if recent efforts are unsuccessful.

Thanks to the Associated Press