The Daily Swarm

Billboard.biz: EMI Confirms Up To 2,000 Job Cuts:

EMI confirmed today that it will cut up to 2,000 jobs worldwide in its Recorded Music division as part of a major restructuring of the company.

The new private equity owners Terra Firma say the cuts will save up to £200 million ($392.2 million) a year and will enable the group to become the world’s “world’s most innovative, artist-friendly and consumer-focused music company.” The changes include a focus on A&R and encouraging new revenue streams from digital services and corporate sponsorship.

Times UK: EMI to cut 2,000 jobs in £200m savings drive:

EMI‘s new owner, Terra Firma, confirmed this morning that it will cut between 1,500 and 2,000 jobs and strip out many of the functions previously given to the company’s record labels, including Parlophone in Britain and Capitol in the United States.

The private equity firm’s plans, which will see nearly a third of the music major’s workforce lose their jobs, are aimed at eliminating “significant duplications” to save £200 million a year.

One-off costs of achieving the savings were not detailed today. These could amount to £100 million, assuming an average severance cost of £50,000 per employee.

Terra Firma will spend today selling its plans to the company’s artists after this morning meeting with its employees to discuss today’s announcement.

Times UK: EMI job cuts: employees react:

Despite the cuts, which could see up to a third of EMI‘s workforce lose their jobs, most employees were upbeat about today’s strategy.

“That’s life, that’s business,” said one man, who said he worked in risk management for the record company.

“I’m optimistic,” said one woman. “We need to start making money,” said another.

FT:

At times Mr Hands sounds despairing: “Can you imagine what would happen if most consumer industries over-shipped by 20 per cent? Can you imagine any consumer industry having 10 per cent of employees as middle management? Can you imagine only 6 per cent of staff in production?”

The record business – in which 85 per cent of artists are lossmaking and EMI pays £25m a year to scrap unsold CDs – “is stuck with a model designed for a world that has changed and gone forever”, he says.

His solution is to switch from pushing CDs to pulling consumers towards music in different forms. One element will be focus groups. “People say the music industry is more creative and the customer doesn’t know, only the creatives do.