BMG NOW OFFERING RETIREMENT PACKAGES

The move is seen as a first strike by the company, as instructed by parent Bertelsmann, to reduce overhead in the wake of posting of a reported $150 million in losses in the year ended June 30 (hitsdailydouble.com, 6/21). Bertelsmann plan’s to cut costs across-the-board as it prepares to go public in the near future.

The voluntary retirement plan is similar to those instituted earlier this year by competitors Warner Music Group and Disney (hitsdailydouble.com, 1/23).

An e-mail detailing the package, which is being offered to people older than 50 who have been at the company more than 10 years, was sent to BMG employees Thursday (7/5).

"As most of you know, the music industry is undergoing enormous change: new technologies, softening consumer demand and renewed focus on profitability are forcing companies (including BMG) to take significant steps to improve their competitiveness," the e-mail read. "In response to these challenges, [BMG CEO] Rolf Schmidt-Holtz recently announced to senior management the ‘Fast and Flexible’ program, in which he commits to ‘a renewed focus on efficiency and cost awareness.’ It is in this context that we announce an important first step in increasing the flexibility and competitiveness of our operations in the US: the BMG Music 2001 Early Retirement Incentive Program."

The e-mail goes on to state that information packets providing specific details about the program will be mailed directly to the homes of eligible employees today (7/9).

News of the retirement plan follows much movement in BMG’s world including executive reorganizations at the highest levels. For further details on recent BMG activities, just punch in BMG on hitsdailydouble’s search engine and prepare for a week’s worth of reading.