Music giant EMI rolls out blueprint for restructuring

Layoff of 2,000 employees confirmed

EMI confirmed Tuesday that it will cut up to 2,000 jobs worldwide in its recorded music division as part of a major restructuring of the company.

The new private-equity owners, Terra Firma, said the cuts will save up to £200 million ($392.2 million) a year and will enable the group to become the world's "most innovative, artist-friendly and consumer-focused music company." The changes include a focus on A&R and encouraging new revenue streams from digital services and corporate sponsorship.

EMI Group chairman Guy Hands on Tuesday announced the reshaping of the company — home to Coldplay, Kylie Minogue and Norah Jones — in a series of presentations to staff, artists and managers. The group said the changes will be implemented over six months and are intended to enable it to invest more in A&R operations, in order to sign strong new artists and maximize the potential of the existing roster of acts.

In addition to the repositioning of the labels to make them completely focused on A&R, the changes also include developing a new partnership with artists "based on transparency and trust" that will help them monetize "the value of their work by opening new income streams such as enhanced digital services and corporate sponsorship arrangements."

Other plans for the restructuring include bringing together key support activities including sales, marketing, manufacturing and distribution into a single division with a unified global leadership. Hands also announced his intention to eliminate significant duplications within the group to simplify processes and reduce waste.

EMI said the changes reflect the rapidly changing nature of the music industry and that the restructuring follows an "intense" three-month consultation review of the business by Terra Firma, following its acquisition of EMI for £3.2 billion last year.

The new owners already were facing an artists' revolt even before today's announcement, with Robbie Williams' manager expressing concern about the direction of the company and Coldplay's manager voicing his "confusion" at the departure of EMI U.K. chairman and CEO Tony Wadsworth last week.

However, the company claims many of the measures being implemented have come at the suggestion of staff, artists and their managers. "We have spent a long time looking intensely at EMI and the problems faced by its recorded music division, which, like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment," Hands said.

"We believe we have devised a new revolutionary structure for the group that will improve every area of the business," he added. "In short, it will make EMI's music more valuable for the company and its artists alike. The changes we are announcing today will ensure that this iconic company will be creating wonderful music in a way that is profitable and sustainable."

Andre Paine is a reporter for Billboard.