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Sony DADC Outsources Production, Sheds 375 Workers in Terre Haute

More sad news today. It has come to our attention that Sony DADC is planning to layoff more than half its workforce at its optical disc (CD, DVD, Blu-ray) replication and logistics facility in Terre Haute, IN.

An official notice sent to the Indiana Department of Workforce Development indicates the company will outsource music and video manufacturing performed at the plant. “As a result, and based on currently available information, we expect that approximately 375 employees in the Terre Haute facility will be separated from employment.”

In terms of timing, the “first employment terminations are scheduled to begin on March 23, 2018, with additional terminations anticipated through August 2018.”

According to published reports, Terre Haute (approx. 1.55m ft²) will continue to replicate new formats, such as 100GB Ultra HD Blu-ray, and discs for Sony’s PlayStation video game console, but other production will be outsourced to rival Technicolor Home Entertainment Services, which maintains North American manufacturing facilities in Guadalajara, Mexico (approx. 270K ft²) and Huntsville, AL (approx. 1.7m ft²). It’s worth noting that all of this comes on the heals of Technicolor’s announcement it is shutting down similar operations in Olyphant, PA.

In a provided statement to Hugh’s News, Lisa Gephardt, Sony Corporation of America’s Senior Director of Corporate Communications, says “Sony DADC Americas has entered into an outsourcing relationship with Technicolor Home Entertainment Services (Technicolor) whereby Technicolor will be providing services to Sony DADC Americas to support the home video and music markets on an on-going basis. The outsource with Technicolor will best enable Sony DADC Americas to continue to provide our customers with efficient cost effective supply chain solutions in a continually evolving Home Entertainment market. Sony DADC will outsource replication and packaging this year, and expect to outsource distribution and transportation management next year.”

Additionally, “the home entertainment packaged media market has faced significant decline over the past several years due to a number of factors, such as the increasing use of popular streaming services like Netflix, Amazon, and Hulu and the decreased emphasis on packaged media by retailers, which has resulted in reductions in allocated retail floor space. Until now we have managed to stay just ahead of the decline curve by aggressively pursuing cost take out and creative operational efficiencies across all DADC product lines. However, the continued decline in the music and home video sectors has brought us to a point where we have reached this difficult but necessary decision to change our operating paradigm.”

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