Music giant EMI plans to cut 200 jobs in bid to save £200m

Jan 16 2008 by Alex Turner, Liverpool Daily Post

STRUGGLING music giant EMI, the label dumped by Paul McCartney last year for being “very boring”, is to cut 2,000 jobs worldwide to save up to £200m a year.

Terra Firma, the private equity firm which bought the group for £3.2bn last year, yesterday announced the restructuring which will cut up to one-third of EMI’s workforce over the next six months.

About one-third of the job cuts will be in the UK.

EMI has struggled with falling CD sales and the rise in digital downloading and piracy and it made pre-tax losses of £263.6m last year.

The support functions of the recorded music division will be hardest hit as duplicated roles are removed while the marketing spend is to be halved so that it is in line with the industry average.

Earlier this week owner Guy Hands, Terra Firma’s chief executive and EMI group chairman, complained that EMI had 19 managers, marketing executives and lawyers for every talent scout in the group.

A new unit, called music services, is being set up to maximise the artists’ potential and co-ordinate how their music is sold and retailed which could include creating sport-style sponsorship deals.

Mr Hands said: “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.

“We believe we have devised a new revolutionary structure for the group that will improve every area of the business.

“In short, it will make EMI’s music more valuable for the company and its artists alike.”

The firm have faced an artists’ revolt in recent months, with performers leaving the label.

Last month Paul McCartney explained why he had left EMI – who still hold the Beatles’ back catalogue – after 45 years and signed to Starbucks’ label, Hear Music.

The former Beatle told The Times: “Everybody at EMI had become a part of the furniture. I’d be a couch; Coldplay are an armchair. And Robbie Williams, I dread to think what he was.

“But the most important thing was, I’d felt [the people at EMI] had become really very boring, y’know? And I dreaded going to see them.”

Radiohead also recently left the label complaining that the new owners didn’t understand the music industry, before they released their latest album on the internet in October allowing fans to download it and pay whatever they wanted.

Robbie Williams remains with the label but his manager, Tim Clark, has described Mr Hands as a “plantation owner” after he called on artists to work harder.

alex.turner