Quakester2000 and GristyMcFisty both used our news submit to tell us that world's largest record company Universal Music is to slash 11% of its workfoce, that's 1,350 jobs. This cutback in personnel is, according to the company, a result of the slump in music sales that has been going on for more than three years. It will come as no major surprise to you that illegal song swapping over the Internet and home CD burning has been blamed by the record industry for this ongoing decrease in sales:
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"[Universal Music] is in the process of instituting significant cost-cutting initiatives that take into account the realities of the declining music market to further rationalize the company's cost structure around the world," the firm said in a statement. The company, which has operations in 71 companies, says 190 job cuts will come in North America but has not yet specified where the other losses will be. Consolidation? Universal is home to stars such as Eminem and Sheryl Crow and is part of France's struggling media giant Vivendi. Vivendi recently sold most of its US entertainment assets to General Electric's NBC but vowed to hang onto the record firm, banking on a recovery in music sales.
Universal's main competitors - including Sony, Warner Music and EMI - have also struggled to cope with falling sales and there has been speculation that the industry will consolidate in order to cut costs. But Universal Music already controls about 30% of the US music market, effectively ruling itself out of any merger talks. |
Source: BBC News
