The Universal Music Group, the largest music company in the world and home to acts like U2, Eminem and Mariah Carey, was expected to announce yesterday a restructuring that will eliminate 11 percent of its work force.
In the next several months, 800 jobs will be cut across all of Universal Music's divisions, according to company executives. Combined with the 550 jobs trimmed earlier this year, Universal Music's work force will shrink to 10,850 people. Executives said the cut will eventually save the company US$200 million a year.
"While we are doing something that is painful, we believe we will ultimately emerge as a stronger company," said Zach Horowitz, president of Universal Music.
The changes come amid one of the most tumultuous environments the music business has ever faced. Sales of recorded music have plummeted in the last three years, dropping nearly 10 percent annually.
The music labels have placed most of the blame for the decline on the swapping of music files over the Internet, although some analysts and consumers have also pointed to excessive prices.
Meanwhile, the labels have struggled to keep talent and marketing costs in check.
Universal Music, which was not included in the recent sale of Vivendi Universal's entertainment assets to General Electric, has also introduced price cuts for retailers. At the beginning of the month, the company lowered the price of most of its new CDs by 25 percent.
Universal Music is not the first of the five major labels to refocus its business.
Earlier this year, Sony Music Entertainment said it was laying off 1,000 people after several quarters of losses, and it hired a new chief executive from outside the music business.
The new chief, Andrew Lack, was a top executive at NBC. Last year the London-based EMI Group cut 1,800 people, 20 percent of its staff. And the Warner Music Group has also restructured its business, while its parent company, Time Warner, weighs a sale or merger with either EMI or Bertelsmann's BMG.
The sale of a controlling interest to EMI for about US$1 billion in cash appears to be the most likely outcome.
Although many analysts and industry executives say they believe further global consolidation is necessary, those financial benefits can go only so far.
In September, Vivendi Universal said its music group had an operating loss of US$48 million for the first half of the year, attributing the results to the decline in the dollar as increased file sharing.
Universal Music's market share has fallen slightly this year. According to Nielsen SoundScan, Universal had 29.8 percent of the market for music sales in the US for the year through Oct. 12, down from 30.5 percent in the same period last year.
But Universal remains the dominant player. The market share of its closest competitor, Warner Music, was 17.3 percent.
Some of the Universal Music's cost cutting will include layoffs of marketing and sales executives. In the Philippines, for example, the staff has been cut from 160 to 30.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS