The bloodletting will happen over the course of the next two years and is expected to save the electronics giant $5.28 billion in purchasing costs this fiscal year, according to The Wall Street Journal.

Delivering the bad news at a supplier conference, Sony executive Yutaka Nakagawa said the company needed to whittle down its 2,500 suppliers of components and materials and increase parts and materials purchased from each remaining supplier.

Nakagawa is the executive deputy president, president of Semiconductor business group, president of the Audio business group, president of Digital Imaging Business Group and officer in charge of Semiconductor & Component Group, Production Strategy, Procurement and Supply Chain for Sony.

"We plan to purchase parts and supplies as 'Sony Group' rather than individual business groups making separate orders," a company spokesperson told the news service AFP.

"By reducing the number of suppliers, orders to individual suppliers should increase. This should allow us to negotiate lower prices," she said.

On May 14, Sony posted a $1 billion loss for the fiscal year ended March 31, its first annual loss in 14 years.

Earlier in the year Sony said it planned to axe 16,000 employees and shutter five factories by March 2010. After reporting its fiscal year loss, Sony said it will close three more Japanese plants by the end of this year.