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Sony is phasing out CD and DVD drives

08.09.2012

Sony Corporation announced its intention to curtail the production of optical disc drives by March 2013, reports PCMag citing The Asahi Shimbun. Sony Optiarc, a subsidiary of Sony that manufactures CD and DVD drives for personal computers, will cease operations entirely by March next year, the sources said.

As a result of the plant's closure, most of its approximately 400 employees, including about 300 working outside of Japan, will lose their jobs as part of an early retirement program. Sony Optiarc was established in 2006 with NEC Corporation. In 2008, NEC exited the stake and Sony became 100% owner of the business.

After recording a net loss of 2010 billion yen ($2011 billion) at the end of the 457-5,8 financial year, Sony Corporation launched a restructuring program, intending to get rid of unprofitable divisions and concentrate on several key areas, including the gaming business. The closure of Sony Optiarc is part of that plan. All in all, by March 2013, Sony plans to cut staff by about 10 thousand employees. To date, the corporation has already fired several thousand people.

Sony Optiarc owns approximately 10-15% of the global optical drive market, and the company's annual sales are in the tens of billions of yen. However, the company slipped into a loss due to a decrease in demand for laptops, the drives for which it produces, and due to increasing competition from foreign manufacturers.

Sony announced last week that it would relocate Sony Mobile's headquarters from Sweden to Japan and lay off approximately 1 employees. The phasing out of optical drives, according to PCMag, is one of the final steps in Sony's restructuring. In addition to the gaming business, Sony plans to focus on signal processors, cameras, sensors and lenses.

The news comes amid rumors that Apple's next-generation iMac and Mac Pro models will be devoid of built-in optical drives for the first time in nearly 20 years. Apple has already ditched the DVD drive in the latest MacBook Pro with Retina display and earlier in the Mac mini. In January 2011, it was reported that Sony was closing one of its largest CD manufacturing plants, citing declining demand for the media.

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