Sony, which has 2,500 suppliers of components and materials, is to cut the number by half in a “life-changing” effort to streamline its cumbersome procurement network and cut costs by about 500 billion yen (£3.3 billion).

The move by the entertainment and electronics group marks another shift in the Japanese business environment which, over the past six months, has undergone more radical changes than at any other time in the past 20 years. Corporate Japan has responded more rapidly and ferociously than expected to the economic crisis — a dramatic fall in consumer spending that has hit Japan hardest of all the leading economies.

The move by Sony compares to a similar “big bang” moment for Nissan shortly after Carlos Ghosn took over as its president in 1999 and rescued it from near-bankruptcy. His measures, which upset the Japanese business establishment at the time, were later hailed as the ideal medicine for unwieldy Japanese manufacturers, though few others followed Mr Ghosn's lead while exports were still brisk and demand appeared to be invulnerable.

Last week Sony revealed that it had lost more than Y95 billion in its 2008 fiscal year, which ended in March. It was the company's first annual loss in 14 years, but it issued a forecast suggesting that a draconian cost-cutting drive may bear fruit by the end of the financial year. Under Sir Howard Stringer, its president and chief executive, Sony is closing eight of its factories worldwide as part of a programme that is expected to deliver about Y300 billion of fixed-cost savings. It has announced 16,000 job cuts and more may come this year.

Sony broke the news to its suppliers at a conference, arguing that it was the only way to keep pace with the rapid commoditisation of so many electronic components and finished products.

Other big Japanese companies, some of which have more than 5,000 suppliers, are expected to follow Sony's lead in a development that one MP said could severely shake Japan's cosy and decades-old business networks. An analyst at CLSA, the brokerage, said that despite potential havoc in the industrial heartlands of Japan, a substantial cut in the number of parts suppliers would almost certainly be welcomed by investors.

The traditional Japanese manufacturing business model, which many regard as broken and unfixable, spread procurement among a host of suppliers. The system helped to support employment levels across the country, but gave rise to inefficiencies as each supplier produced relatively lower volumes.

Within Sony, the games division that produces the PlayStation 3 console is viewed as the worst offender on procurement. Once operated as the personal fiefdom of Ken Kutaragi, the engineering genius, the division was given a free rein with suppliers that was envied throughout the group. The legacy is a games console that continues to lose money two years after its release, company insiders say.

Lenovo, the world's fourth-largest personal computer maker, reported a net loss of $226.4 million (£144 million) for 2008-09, blaming structural changes and weak sales. The Chinese company said that demand for its computers slumped amid the global economic downturn, notably in the United States and India, revenue falling to $14.9 billion, down from $16.35 billion the previous year. Sales fell 26 per cent to $2.77 billion from $3.73 billion a year earlier. It said it expected the market to remain tough this year, though one bright spot could be a burst of stimulus spending in its home market.

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