WARNER MUSIC’S NEXT MOVE

Edgar Bronfman’s investment group closed its $2.6 billion purchase of Warner Music Group yesterday, and the action started immediately. The deal announcement was followed by the exit of Elektra boss Sylvia Rhone and Atlantic Co-Chairman/Co-CEO Val Azzoli and Co-President Ron Shapiro. The departing bosses are expected to be followed out the door by 20% of WMG’s worldwide staff, which amounts to around 1,000 people.

Most of the cuts are expected to come from non-U.S. operations, but there will be significant headcount reductions at the Elektra, Atlantic and Warner Bros., with several reports pointing to a combined Elektra-Atlantic providing considerable cuts. There will also be layoffs at WEA and Warner/Chappell Music.

The consolidation of Warner Music is part of a plan to cut costs by some $200-300 million annually. The Wall Street Journal reports that the one of the big question throughout the process, Roger Ames’ future, has been answered—the paper expects Ames to be announced as vice chairman for the WMG’s global operations. It also noted that WMG has already cut its staff by 30% over the past three years.