EMI confirms job cuts

New owner seeks to save £200m a year

15 Jan 2008 - The new owner of EMI has confirmed he will be cutting up to 2 thousand jobs as he aims to save £200m a year.

New boss Guy Hands made his announcement this morning (15 Jan):

"We have spent a long time looking intensely at EMI and the problems faced by its recorded music division which, like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment,"

Terra Firma boss Guy Hands said. "The changes we are announcing today will ensure that this iconic company will be creating wonderful music in a way that is profitable and sustainable."

Hands added that many of EMI's artists would be dropped: "EMI has over 14 000 artists currently. To provide a good service to 14 000 artists is ridiculous - it's a total impossibility. The idea is to bring it down to a number of artists that we can possibly provide a service to, where we can really work with them."

Marketing, sales and distribution will be centralised into a single division, and Clare Enders, who's the former head of business development at EMI, told the BBC that EMI is actually taking steps the other major studios have already taken in the last 5 years:
 
"EMI is just tackling an issue that was tackled before by its peers in the music business and it's long overdue. The previous management seemed to run the company more for itself rather than for the shareholders. If the management overspends then no amount of good sales it going to save its margin"
 
But Mr Hands has faced criticism for his new restructuring from some of the company's current and past artists, including Robbie Williams and Radiohead.

"The changes we are announcing today will ensure that this iconic company will be creating wonderful music in a way that is profitable and sustainable"
Guy Hands

However, Blur manager Chris Morrison has said Guy Hands has not been making easy decisions:

"When somebody pays a lot of money and buys a company and comes in and makes changes, some of them will be very difficult for certain people who work in that industry but maybe the change is necessary."

Terra Firma bought EMI last year for 3.2 billion pounds including debt, after years of speculation about the group's future.

The announced changes will be put into place over the next six months and EMI said in a statement it expected to then be able to focus more on its artist and repertoire operations to identify and sign promising new artists.

Kelly Stooke