LONDON — EMI, which was taken over by a private equity firm last year, announced Tuesday it would cut about a third of the company's jobs in a restructuring plan aimed at reassuring its restless artists, countering plummeting CD revenue and saving $400 million a year.
"We believe we have devised a new revolutionary structure for the group that will improve every area of the business," said EMI Group chairman Guy Hands.
Under the restructuring announced by Hands at a theater in London, EMI's labels — among them Capitol, Virgin, Parlophone and Blue Note — will be completely focused on A&R. The sales, marketing, manufacturing and distribution operations of the individual labels will be merged.
The changes will be implemented over the next six months and one-third of the cuts will be take place in the U.K., where EMI is based. The recorded music division, which has about 4,500 employees, will be the most affected. Cuts at EMI's music publishing business, which is in far better shape, will be less drastic.
EMI said the overhaul would allow its labels to spot and sign new artists and better handle existing ones.
The company has a lucrative music publishing division that owns the rights to 1 million songs, plus a roster of recording artists that includes the Beastie Boys, Norah Jones, the Spice Girls, the Rolling Stones and Kylie Minogue.
However, the label has fallen on hard times of late. Paul McCartney and Radiohead, two of its biggest acts, have left in the past year, while others, including Coldplay, have expressed concerns with the label.
Artists discontent with EMI has grown ever since it was bought by Terra Firma Capital Partners, which snapped up the company after a deal with Warner Music Group fell through.
The music industry as a whole has been reeling from the long-term decline of CD sales and the rise of digital and online music distribution. Hands acknowledged that EMI, "like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment."
One of the larger issues for EMI has been the failure of it's bigger British acts, including Robbie Williams and Lily Allen, to make a splash in the U.S.
"If you have got a company unable to break acts at all in the biggest market in the world, then you are going to be struggling," Paul Williams, editor of Music Week magazine, revealed to AP London.
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