EMI, of one the major record companies that homes 'stars' as Kylie Minogue, Robbie Williams, Mick Jagger and Mariah Carey but also The Beatles, Paul McCartney, Lenny Kravitz, Janet Jackson, Garth Brooks and Pink Floyd is cutting nearly 1,800 jobs in its recorded music unit.
The company blames the depressed music market and the article on Yahoo doesn't mention music piracy as a possible cause, and that's something new for a change. It seems that EMI has noticed that the music industry, as it is, doesn't work anymore and will try to improve the company to survive.
It said the cuts represent the total of a process of contraction which began in April 2001, when EMI Recorded Music had 9,388 employees. By September, total employment will be 7,600. |
The cash saved will be invested in restructuring the music division, whose lagging performance has led EMI to issue two profit warnings in the past six months. EMI Recorded Music operates in 58 countries, and the company did not immediately say how the job cuts would affect each nation.
EMI shares were down 1.4 percent in trading on the London Stock Exchange. The company said it was taking an exceptional charge of 110 million pounds ($153 million) for the reorganization of EMI Recorded Music, and it will take an additional charge of 92 million pounds ($131 million) to write off loss-making investments and other assets.
That's in addition to the 38 million pounds ($54 million) charge in conncetion with the Carey contract buyout.
The company also mentions a contract with Mariah Carey of $28 million as one of the reasons of their losses. Well if you pay an artist a that big amount of money (to get rid of her!) you are sure you're doing something wrong.
I guess EMI will be one of the first companies that notices that the general public doesn't go for their fairy tales anymore and want value for their money.
Source: Yahoo.com
