It’s been a nerve-wracking week for Universal Music Group staff — many didn’t know once 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 impression 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. In the previous 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, Universal Music Group adopted go well with, instituting layoffs looking for round $270 million in annual financial savings. The course of began Wednesday and continued via 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 inside memo on Feb. 1. The shift reorganized the corporate loosely into an East Coast-West Coast orientation, with Republic Records CEO Monte Lipman overseeing Republic, Def Jam, Island and Mercury, and Interscope Geffen A&M chairman/CEO John Janick liable for Interscope, Geffen, Capitol, Motown, Priority, Verve and Blue Note.
For UMG staff, the lengthy runway main into the layoffs — which have 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 brought on frustration, anger and nervousness, even for individuals who stored their jobs. That the layoffs got here instantly following the annual earnings report, sources say, has led to larger frustration.
Though the scenes staff describe are typical for any firm present process large-scale layoffs — the sluggish drip of reports about who’s been let go, and colleagues crying as they pack up their desks, for instance — UMG’s layoffs have had an outsized impression on business morale due to the label’s place because the dominant market chief, its sturdy monetary outcomes and the prolonged interval for which staff have recognized the cuts have been coming.
In an e-mail to workers, Grange stated that “by reimagining our global structure, we are creating a blueprint for a future where our labels are empowered with new capabilities and additional agility, ensuring they can sign and support artists with enhanced access to UMG’s highest-performing internal teams and resources.” He added, “This organizational redesign represents a new paradigm for artist support and fan engagement.”
UMG first signaled its cuts throughout an earnings name with monetary analysts on the finish of October. “[We] are currently conducting a careful review of our cost base, which we will complete over the coming months, and we will update you when appropriate about an anticipated cost savings program to commence in 2024,” stated Boyd Muir, the corporate’s govt vp and CFO. Grainge added that the corporate deliberate to “cut overheads in order to grow elsewhere.”
Earnings calls are, by nature, filled with statistics and jargon like “adjusted EBITDA.” In January, the human value of “cutting overhead” began to grow to be clear: That would imply shedding a whole bunch of staff. In an announcement on the time, UMG stated “we are creating efficiencies in other areas of the business so we can remain nimble and responsive to the dynamic market, while realizing the benefits of our scale.”
The October earnings name didn’t make huge headlines on the time. But many staff noticed the January studies that layoffs have been looming. “Every day I wake up thinking, is this the day I lose my job?” a UMG worker stated in February.
“It is a particular kind of torture to leave people guessing for an extended period of time,” provides a music lawyer who has artist shoppers signed to UMG labels. “Your job is your No. 1 source of security. You add on top of already stressed individuals’ psyche the uncertainty of whether 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. In 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 shoppers, the layoffs — at UMG, at Warner, the place dozens have been not too long ago let go at Atlantic Records, and amid rumors that different labels will probably be following go well with — 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 laborious to plan a rollout for his act. And a second music legal professional notes that it’s been laborious to do report offers throughout the UMG system figuring out that the groups his artist speaks with will not be round by the point the deal is completed.
Artist groups are additionally making an attempt to know how the cuts impression them. “The more I hear, the more stressed I am,” says one other supervisor. There are “lots of firings across different positions. Some people are getting moved into jobs they aren’t in any way prepared for. And some people are now being asked to do what was previously three different jobs at once.”
There are extra cuts to come back in a “phase two” of the “strategic organizational redesign” subsequent yr, in line with UMG’s investor presentation this week, which said that “a combination of further ex-U.S. headcount reduction and other operational efficiencies” was set to start in 2025. But not a single monetary analyst requested questions concerning the extent of the layoffs on Wednesday. Instead, they requested about UMG’s battle with TikTok.
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