Layoffs Hit Motown Records Amid Capitol Reintegration
Written by djfrosty on February 16, 2023
Staff at Motown Records were hit with news of layoffs Thursday (Feb. 16) as the label gets reintegrated under the Capitol Music Group (CMG) umbrella, multiple sources tell Billboard. The number of people and departments affected are unknown as of press time.
A spokesperson for Motown Records confirmed the layoffs to Billboard. “As Motown returns to the Capitol family, certain positions that had been created when we became a stand-alone label have since become duplicative,” the person said in a statement. “These employees are leaving the company and our People, Inclusion and Culture department is helping them find new opportunities — either within or outside of UMG.”
Layoffs were feared by staffers since chairwoman/CEO Ethiopia Habtemariam’s sudden announcement of her departure on Nov. 29, at which point the future of Motown — which had been spun out of the Capitol Music Group into a standalone label in March 2021, with Habtemariam promoted to the top title — was unclear. In the weeks that followed, it emerged that Motown would be consolidated once again into CMG, at which point the prospect of layoffs loomed.
Motown had been under the CMG umbrella since 2014 when Universal Music Group (UMG) dissolved the Island Def Jam Music Group and moved Motown to Los Angeles to operate out of the Capitol Tower. Habtemariam, who had been president of Motown since that year, oversaw the shift from New York to L.A. and in 2015 led the signing of Motown’s landmark partnership with Atlanta-based Quality Control, which brought Migos, Lil Baby, Lil Yachty, City Girls and others to the label. That led to a surge in interest, signings and market share for Motown, resulting in the establishment of the label as a standalone frontline in 2021, with Habtemariam given the chairman/CEO title.
However, just 20 months after assuming that role, Habtemariam announced she was leaving UMG entirely to “pursue new endeavors,” departing a label that had been energized in recent years without a clear leader. As a standalone label, Motown maintained its own A&R and marketing departments, though it shared services such as radio promotion with Capitol.
CMG is run by Michelle Jubelirer, who was promoted from COO to chair/CEO in December 2021, succeeding Jeff Vaughn, who lasted just a year in the role. Jubelirer oversees a record group that also encompasses Blue Note, Astralwerks and Capitol Christian Music Group, in addition to Motown. While its market share remains under CMG, in September indie distributor Virgin was consolidated alongside Ingrooves and mTheory into the Virgin Music Group, whose co-CEOs report directly to UMG chairman/CEO Lucian Grainge.
However, Capitol will not have Quality Control in its purview moving forward, as the label was sold to HYBE America in a deal that was announced Feb. 8. That means that while Capitol will oversee Motown, it will not have any future releases from some of Motown’s biggest stars of the past decade.
Motown is the latest music company to undergo layoffs in recent months, as the global economy’s outlook remains uncertain. The tech sector was hit particularly hard in that respect, with Amazon, Google/YouTube, Spotify, Twitter, SoundCloud, BMI and others shedding jobs; many cited the dwindling advertising market, which has stubbornly retracted. In October, Grainge himself addressed the advertising market’s downturn when speaking about UMG’s third quarter financials, noting that ad-supported streaming revenue grew slower than expected, up just 5.2% over the third quarter period of 2021, though it was offset by increases in other sectors such as subscription, licensing, tour merchandising and publishing.
In 2022, Motown had raised its overall market share to 0.97%, up from 0.90% in 2021. In terms of current market share — music released over the most recent 18 months — Motown grew its share from 1.18% in 2021 to 1.33% in 2022. It had remained part of Capitol’s market share during that period, despite its ostensible status as a standalone entity. Capitol’s overall market share declined from 6.81% in 2021 to 6.40% in 2022, while its current share dropped from 5.64% in 2021 to 4.97% in 2022.
Additional reporting by Gail Mitchell.