EMI to cut 1,500 jobs, close plants

[Claude]

By MICHAEL McDONOUGH

The Associated Press

3/31/2004, 4:33 a.m. ET

http://www.mlive.com/newsflash/business/in...30743243920.xml

LONDON (AP) ? Music company EMI Group PLC said Wednesday it will slash staffing by 20 percent in its recorded music division, largely because it is ceasing manufacturing CDs and DVDs in the United States and Europe.

In addition to cutting 1,500 jobs, EMI also said it planned to trim its global artist roster by 20 percent, largely by dropping "niche and underperforming artists" mainly in continental Europe.

The London-based company will shut plants making CDs and DVDs in Jacksonville, Ill. and Uden in the Netherlands, and outsource its manufacturing in Europe and the United States. That will result in about 900 jobs being cut.

EMI said the decisions were part of a "continuing drive to maximize efficiency and effectiveness in the changing global music marketplace."

The company didn't specify where the other 600 job cuts were being made. It expected the cuts to yield savings of $91.5 million a year.

EMI said sales for the year ending March 31, 2004 were close to the previous year's level, and added it would publish its annual results on May 24. In the year to March 31, 2003, EMI recorded sales of 2.17 billion pounds, down 11.1 percent from the year before.

"In the financial year just ending, we have outperformed the industry on the most important measures," EMI chairman Eric Nicoli said. "In recorded music, we have enjoyed market share gains, with sales for the full year close to last year's level."

In the Netherlands, CD and DVD manufacturing will be outsourced to MediaMotion and staff at EMI's Uden plant will be transferred to the same company.

In the United States, Cinram International Inc. will make CDs and DVDs for EMI companies currently supplied by the Jacksonville plant. EMI said staff at the Illinois facility had been given notice of the job cuts.

EMI is maintaining its joint-venture manufacturing facilities in Japan and Australia, and a small facility in Canada.

The company also said that in several smaller countries it was consolidating its marketing through a single department. It will merge several smaller labels: the new age label Higher Octave was being combined with Narada, while the Christian music labels Sparrow and Forefront were being merged.

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dropping "niche and underperforming artists"? Will Blue Note keep Norah and Wynton and drop all the others?

Edited March 31, 2004 by Claude

[Simon Weil]

dropping "niche and underperforming artists"? Will Blue Note keep Norah and Wynton and drop all the others? 

I'm guessing it means that by having Nora etc, Bluenote have prevented the EMI top brass looking at the whole record label as "niche and underperforming".

That "niche and underperforming" phrase hit me as well. I mean, talk about encapsulating the difference between having the top brass being accountants or decision makers of some other sort. They don't seem to observe that, from the point of view of a musician, underperforming is someone who doesn't get out and play enough. They might as well be talking about a line of frozen peas.

Nora J is outperforming on her studio efforts.

Simon Weil

Edited March 31, 2004 by Simon Weil

[chris olivarez]

Leaving the music in the hands of the bean counters has corrupted the major labels possibly beyond repair. We are seeing the decline of the major labels can the fall be to far behind?

[BruceH]

Hey, it's the Global Economy!

When you think about it, the major music labels have been a joke for the last 35 years, at least. This is just a major label doing what they do best---stinking up the place. ...And hurting my head like a hundred dogs.

[chris olivarez]

Speaking about a hundred dogs the major labels remind me of a wounded beast lashing out at attackers. The beast may hold off the attackers for awhile but soon the number of attackers overwhelm the beast with the inevitable results. The labels have been losing money for sometime and stomping on some downloading kids isn't going to make as much as a difference as they would like. Its hard for a new act to get a break on a major label and the lack of new talent and new ideas is one of the factors that I think will cause the eventual demise of the big labels.Also their inability to react to adapt to a changing market place will also be their undoing.

[BERIGAN]

Better hope Norah digs her heels in, and insists on staying with Blue Note. I am surprised she hasn't been shuffled off to another label.

[JSngry]

Once again, Bruce Lundvall's industry savvy pays dividends (if you can call simple survival a dividend, and considering the alternative, why couldn't you?) for the music he truly loves.