EMI Confirms Massive Layoffs, Restructuring
Tue, 15 Jan 2008 17:26:20
Growing fears of major changes at EMI were confirmed today, as the label group revealed plans to cut one-third of its jobs—up to 2,000 employees—in the next six months. The move would reportedly save EMI $400 million a year. The London-based company will also combine its marketing, manufacturing and distribution divisions into a single group.
"We believe we have devised a new revolutionary structure for the group that will improve every area of the business," Chairman Guy Hands said in a statement. (Hands was made the head of EMI when the private equity firm, Terra Firma, bought it out last August for $4.9 billion.) Hands added, "Like the rest of the music industry, [EMI] has been struggling to respond to the challenges posed by a digital environment."
One thing EMI has going for it is its publishing division, which owns the rights to 1 million songs, including key tracks from The Rolling Stones, Norah Jones and Radiohead. The only problem? Radiohead and Paul McCartney broke away from the company in the past year, something Coldplay may be considering as they prep a new LP for release sometime in 2008.
Whether this is another nail in the coffin of the music industry's traditional structure remains to be seen, although Peter Ruppert, the head of the music consulting group Entertainment Media Research, remains optimistic. Speaking to the Associated Press, he said, "There is a lot of talk about artists looking for a new approach, going on their own. That is great for artists that are established—they have a completely new world in front of them. But that is not how you get there. There has to be a music company that takes care of you and helps you to get there."
—The ARTISTdirect Staff