Sony DADC has confirmed to Music Business Worldwide that it is to close its main plant in Mexico, as well as its head office in Costa Rica as a result of ongoing global cost-cutting measures from parent company Sony Corp.

The Mexico manufacturing facility, which pressed CDs, DVDs and Blu-ray discs, is located in Tlalnepantla, Mexico and employs around 200 people. Mexico is the world's 14th biggest recorded music market, according to IFPI statistics. In 2013, disc sales contributed $68.2m to the industry, accounting to 51% of all revenues.

This decision to close the Tlalnepantla has nothing to do with Sony Music Mexico, since these are two autonomous companies," said Sony Music Mexico in a statement. The music production company said it will seek new suppliers to manufacture their records.

"In light of the current economic environment and challenges facing the physical media industry, Sony DADC is taking additional steps to reduce cost from our supply chain network in order to remain competitive," a Sony Corp spokesperson told MBW. "The Manufacturing and Distribution facility and the Costa Rica office will be closed and all operations at these locations will cease over the next three to four months. As a result of this closure, all operations staff positions will be eliminated."

In its European home base in Salzburg, Austria, Sony DADC is bracing itself for another wave of layoffs. After the peak season, towards the end of this year, the firm intends to dismiss 30 employees, according to FriedlNews. Contracts of 40 other temporary workers will not be renewed, owing to "changing consumption behaviour." In 2012, the company laid off 200 employees and 120 temp workers.

Story filed 03.05.15