EMUSIC: THE "E" IS FOR "ECONOMIES"
The announcement is part of a savings regimen designed to shave some $15 million in EMusic's costs as the company projects revenue growth of about 20% for the quarter ending 6/30, according to a press release. "Following today's reductions, the company now has approximately 180 employees in its Redwood City, California headquarters and Chicago, New York, Los Angeles and Nashville offices," reads the release.
Rumors have circulated among the digerati for some time that EMusic--which has seen its stock tumble to 2.69 from its 52-week high of $35--was in serious financial difficulty and might even be facing Chapter 11 if it couldn't make itself a sufficiently attractive acquisition target.
One insider says the company may close its L.A. and N.Y.C. satellite offices and is planning to restructure its business strategies. The source adds that all of the company's pending content deals have been put on hold.
"We're not closing any particular office," says VP of Marketing Steve Grady. "A large percentage of the cuts come from our content acquisition team. There are just fewer deals to be done now, since we've covered so much of the independent music space." Grady also disputes the claim that content deals are on hold, but says the company will be "more focused" in such pursuits. "But we need a constant flow of new content, so those endeavors will continue."
In any case, the company continues to present a cheerful aspect. A quote from CEO Gene Hoffman addresses the cost-saving measures: "These preemptive steps reflect the changed dynamics on Wall Street," it reads. "While the market for downloadable music is poised for tremendous growth, we recognize the need to manage our expenses wisely and aggressively. Are you familiar with Amway products?"
