Mon, Feb 8 2010

Written by:CMU Daily

So, no surprises here, really, but word has it the recorded music division of EMI is planning yet more job cuts. This follows news last week that the music major made a £1.75 billion loss in the financial year up to 31 Mar 2009, and desperately needs its owner's financial backers to stump up a £100 million in hard cash in the next few months, otherwise it may renege on its loan commitments to Citigroup, allowing the US bank to take control of the company.

As well as preparing a new business development plan to convince Terra Firma investors that they should stump up yet more cash to save the flagging music firm, EMI Music top man Elio Leoni-Sceti is apparently looking for a load more cost savings, despite a very bloody axe having already been swung in EMI towers back in 2008 shortly after Terra Firma's original acquisition of the company. Then again, EMI's rivals have been quietly streamlining their headcount ever since, so if the London-based major has its heart set on being the most pared to the bone major player in the music business, then a few more sackings are probably needed anyway.

The cuts are likely to be orchestrated by Shane Naughton, the major's new finance director who starts today having left his previous job at Music Week publishers United Business Media. It's thought the firm will outsource some of its back office operations to cut its administrative headcount. Further consolidation of record label operations is also likely, with Leoni-Sceti and Naughton seemingly of the opinion - probably rightly - that the major's Music Services division, what was formerly distribution and now also includes merchandising, is the EMI unit with most potential for revenue growth. They might also want to think of better ways to utilise their hugely valuable recordings catalogue.

Admitting that a radical new business plan is being drawn up, Leoni-Sceti is quoted by the Telegraph thus: "We will present a compelling new five-year business plan with particular focus on the coming year. It will involve both an acceleration in revenues coming from product innovation at EMI Music Services and some cost reductions from the introduction of new systems and technology and the elimination of some duplication. This will confirm our vision to evolve into a digitally-led music company. We have a strong business which is on the right track and that is our best guarantee of our future".

So that's all lovely. I'm now putting my money on an EMI/Warner merger in November.


Written by: CMU Daily
Photo attributed to Liam Dunn

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