Sony Halving Number of Parts Suppliers, Cutting Staff
May 23, 2009 at 2:02 pm by srfto
It’s no secret that the Playstation 3 is more expensive to make than it’s sold for. In addition to having only sold a little over 22 million units worldwide — a full 47 million less than the Wii — Sony is having difficulty keeping their heads about water. And it doesn’t help that Sony has reported a $1 billion loss — their first net loss in 14 years.
To combat their steadily growing debts, they have cut the number of their parts suppliers from around 2,500 to 1,200. It’s estimated that this cut will reduce the cost of the console production-side by 20 percent ($5.3 billion dollars).
Prior to this cut, each Sony division had their own contracts with different suppliers. They are now moving forward to work with the same suppliers to cut costs.
Sony hopes to move forward as a more “innovate, integrated and agile global company.”
Along with the announced supplier cuts, they are also planning to cut 8,000 global employees from their current 185,000. They are also intending to cut another 8,000 from their temporary workers who are not in the global workforce numbers.
Some may see this as bad news or a sort of kiss of death for the Playstation 3, but last year the PS3 division managed to halve its operating losses with the help of cost reductions in hardware. Only time will tell, but Sony doesn’t look like it’s about to give up anytime soon.