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EMI cuts 2,000 jobs, blames digital music

updated 11:00 am EST, Tue January 15, 2008

EMI Cuts 2000 Jobs

Major music label EMI will slash as many as 2,000 jobs in a bid to sustain itself, company chief Guy Hands revealed today. Although the firm's music contains only about 4,500 workers, at least one third (1,500) and as many as 2,000 will be let go to reduce the beleaguered label's costs by as much as $393 million per year. This will also come with a consolidation that brings normally separate distribution, marketing, and sales into a more efficient single group. It should also allow sub-labels such as Capitol or Parlophone more freedom to find and sign new musicians, according to EMI. The seemingly drastic move has largely been credited to the struggle to adapt to downloadable music,

"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 says.

The executive did not clarify whether he attributed the drop chiefly to piracy or to bolstering online sales. EMI has been considered one of the most aggressive major labels in recent months and launched DRM-free music for iTunes and other online stores in May, months ahead of moves by competitors Universal, Warner, and now Sony BMG. However, EMI has been struggling financially and accepted a buyout by Terra Firma last year to help recover from declining fortunes. Guy Hands is also head of the firm, which acts as a private equity group.

EMI's decision today is also believed to be spurred on by an inability to retain and promote top-tier artists. The group's best-performing artist, Lily Allen, only reached 26th in the UK charts though has proven more successful in the US. Former Beatle Paul McCartney also left his longtime association with EMI in favor of Starbucks' new Hear Music label, while Radiohead decided not to renew its contracts in favor of self-released content and independent labels.



By Electronista Staff
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  1. zaghahzag

    Dedicated MacNNer

    Joined: Aug 2006

    0

    meanwhile CEOS get multi$

    CEOS get big bonuses, low level guys get fired. the music they produce is still overpriced and crappy. I'm crying.

  1. BelugaShark

    Fresh-Faced Recruit

    Joined: Aug 2007

    0

    x

    According to the article, each one of those employees makes an average of $196,500

    There's gonna be many foreclosures in that state.

  1. climacs

    Junior Member

    Joined: Sep 2001

    0

    long overdue

    this article neatly encapsulates what has happened to the music labels and where it's going. If other record labels keep blaming piracy and think that they can sue it out of existence, then they are going to die without seeing what's really going on. Artists don't necessarily need them anymore.

  1. climacs

    Junior Member

    Joined: Sep 2001

    0

    oops

    meant to write, if other record labels keep blaming piracy and think that suing it out of existence - which can never happen, if they knew anything at all about the nature of technology - is going to fix their problems, then they are going to go straight to bankruptcy without every really seeing what's going on.

  1. notehead

    Fresh-Faced Recruit

    Joined: Aug 2001

    0

    salaries

    belugashark, I had just made the same calculation. Surely, most employees earn less than half that... which means that some of them earn a LOT more. What the h*** are the positions over at EMI that pay so much?

  1. jameshays

    Fresh-Faced Recruit

    Joined: Mar 2003

    0

    re: meanwhile CEOS get mu

    And they should. A grunt employee can easily be replaced. A TOP CEO can bring enough value to employ thousands of people paying out millions of dollars in wages. There's a lot of value in that.

    Most people claim your argument because they are the little guy that can easily be replaced making minimum wage. If you don't like it, don't be an employee.

  1. macnorway2000

    Fresh-Faced Recruit

    Joined: Nov 2006

    0

    Wrong calculation

    They are saying that they are saving *costs*, not salaries. That means that the avg. $193K also include all related costs for having employees on board (office space, equipment, etc. etc.). Infrastructure for up to 2000 people amount to a lot. That may effectively cut the average SALARY in half.

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