EMI to cut 1500 jobs and one in five artists

EMI, the global music group, is axing 1500 jobs at its EMI Music division as it strives to hit an annual cost-saving target of £50 million.

The shrinkage represents about 20 per cent of the unit’s workforce with most of the redundancies stemming from the company’s decision to outsource manufacturing of its CDs and DVDs in Europe and the United States to third-party contractors.About 900 of the job cuts will arise from the closure of plants in Uden, Holland and Illinois, America, with the shake-up prompting a one-off cost of £75m.

A spokesman for the world’s third-biggest record company said "a small fraction" of the job cuts would take place at its sites in the UK, but refused to say how many.

EMI also said it was getting rid of about 20 per cent of its "niche and under-performing artists" as it overhauls its portfolio of 70 separate labels and artist line-up. However, the London-based company, which like its peers has been hit hard by illegal piracy of its music, did not name any of the artists likely to get the chop.

"The roster is being rebalanced to focus resources and efforts more effectively on the artists who have the greatest potential on both a global and local level," the firm said in a statement.

Among its 1500-strong stable of artists are megastars Robbie Williams, Janet Jackson, The Verve, Rolling Stones, Coldplay and Radiohead.

Updating on current trading, the firm said full-year sales in recorded music were "close to previous year’s level" with a "solid performance in music publishing".

Alain Levy, the group’s chairman and chief executive of EMI Music, said: "The time is right to further reposition EMI Music.

"Exiting manufacturing in our two primary regions of Europe and the US will allow us to lower our costs while flexibly meeting our supply needs in the future."

He added: "We believe that by concentrating our efforts on a tightened roster of artists we will increase our revenue-generating potential while reducing our costs, even as we continue to invest in artists worldwide and in developing our digital capabilities."

Group chairman Eric Nicoli said tough market conditions over the past two years had forced changes on the company’s recorded music business and steps had been taken to maintain its competitive position.

Over that time, changes in management have helped deliver savings of £100m and the group’s US division had also improved its performance.

Mr Nicoli said: "The actions announced today represent another major step forward.

"EMI will continue to be an agile and progressive music content company that fully embraces and profits from changes in technology and consumer trends.

"Whilst we remain optimistic that the market will return to growth in due course, we are committed to being in the best possible shape to compete in all conditions and to take advantage of improving trends."

In recent years, EMI has seen two merger attempts blocked by regulators, one with Warner Music and one with Bertelsmann’s music arm BMG. Last year it bowed out of the race for Time Warner’s music business.

Source: Scotsman