A final chorus for many at EMI
Thousands of staffers, artists to be cut in restructureEMI declined comment Monday on newspaper reports that it is planning to cut as many as 2,000 jobs — more than a third of its total work force — as part of its ongoing restructuring.
EMI Group chairman Guy Hands will make an announcement to staff at a meeting today in west London.
The Wall Street Journal reported that private-equity firm Terra Firma Capital Partners, which bought EMI last year for $4.7 billion, plans to cut costs at the troubled music company by up to $391 million a year. The savings would come through job reductions and by centralizing sales, marketing and administrative functions.
Reuters said most of the cuts will hit the recorded music business rather than the music publishing operations.
Press reports out of London said that EMI's marketing budget would be slashed from 20% of projected sales to 12%. But spending on A&R, which looks for new talent, will be increased.
Hands is hoping to more than double the company's profits, the reports said, and plans to ditch thousands of artists from EMI's roster. He already has said he wants the company to be more selective with its partnerships, warning artists that they would be dropped if they did not work hard enough. He also called for a "fundamental shift" in the way the company does business.
In an interview in Monday's editions of the Financial Times, Hands said that just 200 of EMI's 14,000 artists made most of its revenue and that about 85% of artists lose money for their labels.
He also said EMI spends about $137 million a year subsidizing the 15% who never produce an album. The company has exceeded marketing budgets by more than $115 million a year, he added, and wastes almost $50 million a year scrapping unsold CDs.
EMI's roster includes such acts as the Rolling Stones, Coldplay, Beastie Boys, Robbie Williams and Norah Jones. Its catalog acts include the Beatles, the Beach Boys, Pink Floyd, Queen, Bob Seger and David Bowie. The company was a distant fourth among the four major labels in U.S. market share last year, with 10.2%.
Andre Paine is a correspondent for Billboard. Reuters and the Associated Press contributed to this report.