EMI to cut as many as 2,000 in restructuring
CHICAGO - British music conglomerate EMI Group said Tuesday it will cut between 1,500 and 2,000 jobs, or about a third of its workforce, as part of a restructuring intended to save the company more than 200 million pounds ($392.2 million) per year.
EMI also plans to "reposition" its record labels, which include Capitol, Virgin, Relentless, Blue Note and many others, to make sure they will be "completely focused" on developing and maximizing the potential of their artists.
Private equity firm Terra Firma, which acquired EMI last year, said the reorganization is the result of a three-month review of the business.
"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," said Guy Hands, chairman of EMI, in a statement.
One of the company's new initiatives will be an effort to help EMI artists generate more income through "enhanced digital services and corporate sponsorship arrangements."
Since the advent of music file-sharing in the late 1990s, sales of CDs have been on the decline.
The introduction of Apple Computer Corp.'s iTunes platform in 2001 sped up the downturn in CDs popularity, as consumers were able to cherry pick individual songs they liked, rather than having to buy a whole album.
In the first half of 2007, album sales dropped 15.1 percent from the same six months a year earlier, according to data from Nielsen Soundscan. Of the big four music giants, EMI finished last in market share during the period at 10.3 percent, trailing Universal Music Group, Sony Music Group and Warner Music Group.