UMG LOPS ANOTHER
800 OFF THE PAYROLL
Blaming an "unprecedented" worldwide music downturn, along with "Internet and physical piracy," the Universal Music Group will pare another 800 employees from its worldwide payroll across all divisions, with 190 of those coming in North America. The layoffs will begin taking place today.
A statement released by the company read: "Like all responsible companies, Universal Music Group is continually evaluating its business in order to maintain the most efficient and competitive music company in the industry and be well-positioned for the future. UMG is in the process of instituting significant cost-cutting initiatives that take into account the realities of the declining music market to further rationalize the company's cost structure around the world."
At the same time, Vivendi Universal reiterated that the Music Group is not on the sales block, and that they remain bullish on the music business in the long run, given the developments in online distribution and innovative marketing opportunities, like its recent deal with eBay.
Since the start of the year, UMG has eliminated 550 positions (250 in North America), bringing to 1350 the total of jobs lost worldwide, more than 10% of its total of 12,200 at the beginning of 2003. By early 2004, the company head count will be at 10,850.
The company is counting on the cost-cutting from the layoffs generating $200 million in savings, particularly in the areas of "overhead, infrastructure, marketing and A&R."
Insiders stressed its individual labels will remain intact, as will their upper-level management.
Company sources insisted that VU is "looking forward to expanding its industry-leading 30% marketshare with a strong fourth quarter release schedule while continuing to build for the future."
