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.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat
RSS