It’s been a nerve-wracking week for Common Music Group staff — many didn’t know after they went to the workplace on Wednesday morning in the event that they’d have a job on Friday. Layoffs hit division heads first after which began to affect the rank and file.
Over the previous yr, greater than a dozen firms throughout the music enterprise have undergone layoffs, eliminating 1000’s of jobs and leaving those that stay in a state of uncertainty. Up to now twelve months alone, Warner Music Group, Atlantic Music Group, SiriusXM, Amazon Music, TikTok Music, CAA, Discord, BMG, TIDAL and Spotify have all minimize workers.
This week, Common Music Group adopted swimsuit, instituting layoffs searching for round $270 million in annual financial savings. The method began Wednesday and continued by way of Friday (March 1), impacting publicity departments, radio groups, A&R, advertising and extra.
The cuts are a part of a restructure of UMG’s label operations that chairman/CEO Lucian Grainge introduced in an inner memo on Feb. 1. The shift reorganized the corporate loosely into an East Coast-West Coast orientation, with Republic Data CEO Monte Lipman overseeing Republic, Def Jam, Island and Mercury, and Interscope Geffen A&M chairman/CEO John Janick answerable for Interscope, Geffen, Capitol, Motown, Precedence, Verve and Blue Word.
For UMG staff, the lengthy runway main into the layoffs — which had been first hinted at again in October — mixed with the truth that the corporate introduced on Wednesday morning that it had earned greater than $12 billion in income and $1.3 billion in internet revenue in 2023, has prompted frustration, anger and anxiousness, even for individuals who saved their jobs. That the layoffs got here instantly following the annual earnings report, sources say, has led to larger frustration.
Although the scenes staff describe are typical for any firm present process large-scale layoffs — the sluggish drip of stories about who’s been let go, and colleagues crying as they pack up their desks, for instance — UMG’s layoffs have had an outsized affect on business morale due to the label’s place because the dominant market chief, its robust monetary outcomes and the prolonged interval for which staff have recognized the cuts had been coming.
In an electronic mail to workers, Grange mentioned that “by reimagining our international construction, we’re making a blueprint for a future the place our labels are empowered with new capabilities and extra agility, guaranteeing they will signal and assist artists with enhanced entry to UMG’s highest-performing inner groups and sources.” He added, “This organizational redesign represents a brand new paradigm for artist assist and fan engagement.”
UMG first signaled its cuts throughout an earnings name with monetary analysts on the finish of October. “[We] are at present conducting a cautious assessment of our value base, which we are going to full over the approaching months, and we are going to replace you when acceptable about an anticipated value financial savings program to begin in 2024,” mentioned Boyd Muir, the corporate’s government vp and CFO. Grainge added that the corporate deliberate to “minimize overheads to be able to develop elsewhere.”
Earnings calls are, by nature, filled with statistics and jargon like “adjusted EBITDA.” In January, the human value of “reducing overhead” began to grow to be clear: That may imply shedding a whole bunch of staff. In a press release on the time, UMG mentioned “we’re creating efficiencies in different areas of the enterprise so we are able to stay nimble and conscious of the dynamic market, whereas realizing the advantages of our scale.”
The October earnings name didn’t make massive headlines on the time. However many staff noticed the January stories that layoffs had been looming. “Daily I get up considering, is that this the day I lose my job?” a UMG worker mentioned in February.
“It’s a explicit type of torture to go away individuals guessing for an prolonged time period,” provides a music lawyer who has artist purchasers signed to UMG labels. “Your job is your No. 1 supply of safety. You add on prime of already careworn people’ psyche the uncertainty of whether or not or not they’re gonna have a job tomorrow and draw that out for months.”
A UMG spokesperson declined to reveal any headcount for the cuts. Within the meantime, sources say executives and division heads have obtained some beneficiant exit packages on their approach out the door.
For others outdoors the labels who work with them on behalf of purchasers, the layoffs — at UMG, at Warner, the place dozens had been not too long ago let go at Atlantic Data, and amid rumors that different labels will probably be following swimsuit — have additionally made life tough. With UMG particularly, one supervisor with an artist signed to a UMG label says that the stress permeating the labels has made it arduous to plan a rollout for his act. And a second music legal professional notes that it’s been arduous to do report offers inside the UMG system realizing that the groups his artist speaks with will not be round by the point the deal is finished.
Artist groups are additionally making an attempt to grasp how the cuts affect them. “The extra I hear, the extra careworn I’m,” says one other supervisor. There are “plenty of firings throughout totally different positions. Some individuals are getting moved into jobs they aren’t in any approach ready for. And a few individuals are actually being requested to do what was beforehand three totally different jobs directly.”
There are extra cuts to come back in a “part two” of the “strategic organizational redesign” subsequent yr, in keeping with UMG’s investor presentation this week, which said that “a mixture of additional ex-U.S. headcount discount and different operational efficiencies” was set to start in 2025. However not a single monetary analyst requested questions concerning the extent of the layoffs on Wednesday. As a substitute, they requested about UMG’s battle with TikTok.
