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.