Sony has said it will cut around 8000 jobs by 2010 in a bid to bring down costs across the company.
As the economic squeeze begins to spread from Europe and America into Japan, Sony believes it will need to cut 5% of its workforce to make ends meet.
The company has also revealed it will close two of its overseas manufacturing sites, with an aim to reduce plant operations by 10% over the next 15 months, particularly in the areas of LCD and mobile phone technology.
And finally, in an attempt to save around $1.1 billion by March 2010, the company will also be cutting manufacturing investment by around 30% as well.
Japan's economy has shrunk by 1.4% over the past three months, which has caused businesses to panic as that is more than four times the amount estimated.
"Particularly within its electronics business, where Sony has been most affected by the acute downturn in the economic climate, the company has already undertaken certain short-term measures, including adjusting production, lowering inventory levels, and reducing operational expenses", read a statement from the company.
"Going forward, Sony intends to adjust product pricing to mitigate the impact of the appreciation of the yen, curtail or delay part of its investment plans, and downsize or withdraw from unprofitable or non-core businesses".
"Furthermore, Sony plans to realign domestic and overseas manufacturing sites, reallocate its workforce and reduce headcount".
Sony has confirmed that the PlayStation division of the business will be under review with the rest of it, and could well be affected by the job losses, which have not been capped at the 8000 mark and could well exceed that if Sony see fit.
"In order to stay competitive in the accelerating global network environment, we will always carefully review and make structural changes, if necessary, in order to further expand and strengthen the PlayStation business around the world", said Sony Computer Entertainment.
We'll keep you updated with any news we hear.