UPDATED: In a morning meeting in London, Terra Firma head Guy Hands confirmed that he will cut 1500 - 2000 jobs as part of an effort to cut costs by almost $400 million. The cuts represent about a third of EMI's 5500 person workforce and will take place over the next 6 months.
EMI "has been struggling to respond to the challenges posed by a digital environment,'' Hands said in the statement. "We believe we have devised a new revolutionary structure for the group that will improve every area of the business.'' EMI currently 19 managers, marketing executives and lawyers for every talent scout, he explained.
Hands has reportedly raised almost $500 million in additional funding and will shift more resources to A&R. He is is promising change in a structure that currently has 19 managers, marketing exec and lawyers for every A&R person.
Some details of the new structure were shared with staff in a morning meeting in London and with manager's this afternoon at an undisclosed location. Hands flies to the US on Wednesday to brief US staff, artists and managers.
EMI lost a record $572 million in the fiscal year ended March 31, 2007. In the U.S., which accounts for about a third of the global music market, EMI had none of the top 10 best-selling albums in 2006, according to Nielsen SoundScan.
This is not good news for the staff at EMI, but sadly this dramatic shift may be exactly what is needed at all four major labels...
We should wait to pass judgement until real details emerge of Hands' plan to move the label group forward with signings, marketing, and new alliances. A "new EMI" focusing more "on A&R and serving the artist" are just words that require definition.
Sadly, I'm skeptical that this all will prove to be like so many other takeovers, buyouts and mergers we see on the corporate world. They wring savings and profits from existing assets buy cutting jobs and overhead as Hands did today. But all to often in the long run they do little to build new ones.