British music company EMI is to axe up to 2,000 jobs in a restructuring plan by its new private-equity owners to save up to 200 million pounds ($392 million) a year and recast itself for the digital age.
AP
EMI
The worldwide cuts at EMI, home to The Beatles, Coldplay and Kylie Minogue, will come from the troubled recorded music division which has around 4,500 staff and which has been hit hard in recent years by the fall in CD sales, Internet piracy and a poor release schedule.
In the list of Britain's biggest-selling albums in 2007, EMI's highest entry was at 26, with Lily Allen's Alright, Still.
In a bid to allow the labels to focus on discovering new artists, the company plans to bring its marketing, sales and distribution into a single division over the next six months.
But the plans have already angered many of its big-name artists including Robbie Williams who has threatened to withhold his next album over fears that EMI will not be able to devote enough time, money and people to promoting new releases.
Between 1,500 and 2,000 jobs will go.
"We have spent a long time looking intensely at EMI and the problems faced by its recorded music division which, like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment," new owner Terra Firma boss Guy Hands said.
"The changes we are announcing today will ensure that this iconic company will be creating wonderful music in a way that is profitable and sustainable."
The announcement follows a three-month review by Terra Firma which bought EMI last year for 2.4 billion pounds, or 3.2 billion pounds including debt, after years of speculation about the group's future.
At the time of the purchase, Hands said EMI would look to increase its digital sales, keep the company intact and securitize its more reliable music-publishing assets.
But that last proposal, which would have allowed it to borrow against revenues from the publishing division, has been put on hold, while criticism from its headline artists has intensified.
British group Radiohead left last year, describing the new management as behaving like "confused bulls in a china shop," while Paul McCartney quit, labeling the company "really very boring."
And it has all been played out in the world's press, keen to see if Guy Hands and his "suits" can turn the company around.
Hands was meeting staff in central London on Tuesday morning to inform them of his plans.