Sony Optiarc, based in Atsugi, south of Tokyo, will cease production of the drives, which use a device to read and write information, and make most of the employees in Atsugi and at a factory in Malaysia, totalling about 390 at least, redundant, Asahi said without quoting sources.
The unit, which was founded in 2006 as a joint venture with NEC and became Sony's 100 per cent subsidiary two years later, has not fared well due to shrinking PC sales and fierce price competition with foreign rivals.
In April, Sony's new president, Kazuo Hirai, outlined a revival plan that stakes Sony's future on mobile devices such as the Xperia smartphone, gaming and digital imaging, while developing new businesses, including a medical unit.
Hirai also promised to cut 10,000 jobs - six per cent of its global workforce - this business year and big cost reductions in the TV unit that has produced losses amounting to about $12 billion in the past decade.
Sony earlier this month slashed its forecast for operating profit in the year to March 2013 and lowered sales expectations for key products including its handheld PSP and PS Vita devices.
Shares of Sony have lost some 40 per cent since it announced the revival plan, but hovered about 5 per cent above a trough of 877 yen after it announced the disappointing forecast on August 2.