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The layoffs and restructuring at the Universal Music Group have begun to take place, multiple sources tell Billboard.
As part of the new structure, several top executives have been laid off, Billboard can confirm. Interscope Geffen A&M president of promotion Brenda Romano is among those to have been let go, as well as Interscope’s executive vp/head of media strategy and communications Cara Donatto and Def Jam executive vp of media and brand strategy Gabe Tesoriero.
So far, Billboard has confirmed over two dozen layoffs across UMG labels, including Interscope, Republic, Capitol, Def Jam and Island.
The layoffs began shortly after Universal wrapped up its fourth quarter earnings call Wednesday, during which chairman/CEO Lucian Grainge confirmed a long-rumored “strategic organizational redesign” that would result in “reduced headcount” and “efficiencies.” A UMG spokesperson declined to say how many staffers would be affected by the cuts, but the company told investors that it expected to realize 250 million euros ($271 million) in annual savings by 2026 through the move. Universal saw 11.11 billion euros ($12 billion) in revenue in 2023, and reaped a net profit of 1.26 billion euros ($1.37 billion).
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The layoffs had been in the offing since last October, when Grainge mentioned that UMG would need to “cut to grow” in a Q3 earnings call, then said in a January New Year’s memo to staff that despite UMG being the “most successful company in the history of the music industry,” the company would “further evolve our organizational structure to create efficiencies in other areas of the business, so we can remain nimble and responsive to opportunities as they arise, while also taking advantage of the benefits of our scale.” A spokesperson then confirmed cuts were coming in a statement Jan. 12, after Bloomberg reported the company planned to cut “hundreds” of jobs in the first quarter of the year.
Layoffs continued Thursday (Feb. 29), and some staffers speculated to Billboard that they may continue into Friday. There is no word on how many people were affected, nor any specifics in what departments they were, though in addition to promotions, publicity and A&R, at least some people in logistics, synch, international and commercial marketing were among the layoffs. Staff members from Republic, Interscope, Capitol, Island and Def Jam were among those laid off.
On Feb. 1, Grainge announced in an internal memo that Universal would be restructuring its label operations, adopting a loose East Coast-West Coast operation wherein Republic Records co-founder/CEO Monte Lipman would begin to oversee Republic, Def Jam, Island and Mercury, and Interscope Geffen A&M chairman/CEO John Janick would take responsibility for Interscope, Geffen, Capitol, Motown, Priority, Verve and Blue Note. Days later, Capitol Music Group chair/CEO Michelle Jubelirer announced she was stepping down from her post and was replaced by Geffen president Tom March as chairman/CEO of Capitol and Universal Music Publishing Group executive Lillia Parsa joining as co-president alongside Arjun Pulijal.
As part of the new alignment, and with Donatto and Tesoriero out at Interscope and Def Jam, respectively, it appears that Capitol Music Group executive vp/head of media strategy and relations Ambrosia Healy will now run corporate communications for the West Coast labels, and Republic Records executive vp of media and artist relations Joe Carozza will oversee corporate communications for the East Coast labels.
Reps for UMG did not respond to multiple requests for comment. Additionally, reps for several individual labels either declined to comment or could not be reached for comment.
This story is developing.
In January 1999, Universal Music Group laid off hundreds of employees during a wave of consolidation with PolyGram. “The biggest staff cuts were at Geffen and A&M, two Los Angeles-based labels that have been folded into Interscope Records … and at Island Records, which has been merged with Mercury,” Billboard reported at the time, predicting that the cuts would affect label rosters, with “baby bands … expected to suffer the most casualties in the shake-ups.” In an interview with The New York Times, one artist manager described the impact of the merger on his band as if “a car [got] shut off in midgear.”
Roughly 25 years later, UMG is expected to cut hundreds of jobs to create “efficiencies in other areas of the business so we can remain nimble and responsive to the dynamic market,” according to a January statement from the company. Warner Music Group has announced layoffs of more than 800 people in two rounds over the last 12 months; on Monday, WMG label Atlantic Records announced additional cuts of about two dozen employees, primarily in the radio and video departments. (Sony Music is also expected to trim staff, according to sources; a rep for Sony declined to comment.)
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These cuts herald a leaner approach to the major-label business, and some talent and their representatives are worried about how this impacts their future.
Artists “are going to be upset,” says Mike Biggane, who was head of curation for Spotify, then worked at UMG as global executive vp of music strategy and tactics until last year. “The teams that artists signed up for and have been going to battle with will all be gone. That is going to impact the managers and the remaining label staff, who are already spread too thin.”
“If you’re not a multi-platinum artist, good luck,” says Allen Kovac, a longtime manager who had several acts in the UMG system during the 1999 consolidation.
A rep for UMG declined to comment. Speaking to financial analysts on Wednesday, UMG CEO Lucian Grainge said that “when it comes to supporting their rosters, [labels] will have access to our highest performing internal teams and resources to bring the new artists to even higher levels of success.”
And some executives were more sanguine about the impact of the upcoming staff cuts. Chris Anokute manages Taela, who was signed by Michelle Jubelirer before she recently left Capitol Music Group. “I’m very grateful to Michelle for signing her,” Anokute says. “Now there’s new management, and I’m excited to work with the new team to keep on developing her. I’m not worried for one second.”
Major labels have been consolidating internally for more than two decades. In 2004, Atlantic Records and Elektra Records merged as part of a Warner Music Group shake-up that included 1,000 layoffs. “Warner began cutting money-losing and under-performing artists from its merged Atlantic-Elektra label’s roster, and is preparing to let go as many as half of the label’s 170 acts,” The Washington Post reported.
Later the same year, BMG and Sony Music merged. “In each market tough decisions will have to be made about the senior executive lineup, overall staffing and artist rosters,” Billboard wrote.
While layoffs were typically followed by roster trimming in the past, history can serve only as a limited guide when assessing the latest round of cuts. “The environment today seems quite different to that of the late 1970s and early 1980s — the first time the industry experienced serious contraction — or the early 2000s,” says Adam White, a former Billboard editor-in-chief who later served as UMG vp of international communications. “During both of those time periods, industry sales slumped significantly and staff cutbacks were widespread. Isn’t that in contrast to the current environment, with revenue admittedly not growing at previous, double-digit rates — but still growing?”
Nonetheless, with leaner staffs, “you either need to spread your remaining staff more thinly or serve a smaller roster,” says Peter Sinclair, who worked at UMG for five years before founding beatBread, an artist-funding platform, in 2020.
Some major-label executives contend the staffing changes their companies are making will let them offer more resources to artists, not less. WMG CEO Robert Kyncl, for example, told staff that the cost savings from recent cuts would free up money that can be put towards “increasing funding behind artists and songwriters,” while Atlantic Music Group chairman/CEO Julie Greenwald said the company would be “bringing on new and additional skill sets in social media [and] content creation” to “help artists tell their stories.” In a memo to staff on Wednesday (Feb. 28), Grainge wrote that “our long-term growth strategy, including this organizational redesign, represents a new paradigm for artist support.”
However, many acts believe major-label staffs are already stretched perilously thin, and that layoffs will only exacerbate artists’ feelings of being underserved. “Way too many of my clients complain about what the labels aren’t doing for them,” says Todd Rubenstein, an entertainment attorney. “Even if there is a whole plan they come in with, it’s still not getting serviced.”
“I’m not anti-label; I think every single artist we have is on a major label,” adds Crush Management founder Jonathan Daniel. But “the reason I set up my company the way I did” — Crush has its own marketing and radio promotion staff — “is because labels always have too many artists for how many people work there.”
Labels are already more willing to trim their rosters than they were in the past, and A&R executives say this may have intensified independent of the recent layoff announcements, after a period of excessive signing driven by pressure to maintain market share and an abundance of viral hits on social media. “Would [layoffs] speed up the process of trimming the roster?” asks entertainment attorney Michael Sukin. “Sure, but labels don’t need an excuse.”
That said, when employees are laid off or leave to take another job, some artists will lose their internal advocates. Executives believe it’s likely that there are acts in the UMG system who won’t have their options picked up after the layoffs because no one inside the buildings will fight to keep them.
“Any artist that’s more singles-based is more of a risk on your balance sheet,” says one A&R executive-turned-manager. “They want artists that have sticky fan bases that will be there and support them when they don’t have a hit.”
This all sounds nerve wracking for artists, who are, after all, the lifeblood of record companies. In reality, though, an artist who was a label’s 40th most important act may not have been getting a ton of help anyway — as a UMG executive told The New York Times around the time of the Polygram merger, “for the [artists] we let go, they’ve probably already been dragged over the coals by a record label that can’t do the best job for them.” Nick Stern, another longtime artist manager, is fond of saying “there’s nothing better than being a top five priority at a major label, and nothing worse than being 20 to 50.”
And while artists who got dropped by a major label in 1999 didn’t have many ways to get their music heard around the world, that’s not the case in today’s digital industry. Song creation, distribution and marketing are now all far more affordable. “As the majors’ gatekeeping role shrinks, artists have more options, more leverage, more control and more creative freedom,” Sinclair says. “If you’re an artist and you get dropped by the majors, I’d recommend you take it for what it is: an opportunity.”
When Biggane left UMG last year, he started Big Effect, a company developing technology designed for smaller artist teams to release products and manage catalog effectively. He predicts an “exodus of talent on both sides — people working in the industry trying to provide services and artists looking for services.”
“They’re all going to come out in the independent market,” Biggane says, “and try to find each other.”
Additional reporting by Kristin Robinson
As part of its fourth-quarter earnings call, Universal Music Group (UMG) said that a “strategic organizational redesign” it announced Wednesday (Feb. 28) would result in 250 million euros ($271 million) in annual savings by 2026, with a first phase of 75 million euros ($81.3 million) in 2024 and 125 million euros ($135.5 million) in 2025. The redesign is expected to include the long-awaited layoffs that have been signaled by the company for months, though the specifics of how many employees would be affected and what percentage of the overall workforce it would amount to was not disclosed.
The “plan is designed to achieve efficiencies in targeted cost areas while strengthening labels’ capabilities to deepen artist and fan connections,” according to a press release. The first phase will involve a general headcount reduction, while the second phase, which is scheduled to begin next year, will be “a combination of further ex-U.S. headcount reduction and other operational efficiencies,” according to the company’s investor presentation.
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A representative for UMG declined to comment on the specifics of the reductions.
“To put it simply, we’re creating the blueprint to the music company and the labels of the future,” chairman/CEO Lucian Grainge said on the earnings call, adding that labels will have “even greater flexibility and speed” in supporting artists, as well as “access to our highest performing internal teams and resources to bring artists to even higher levels of success.” The redesign “carefully preserves what we’re best at: creative A&R, marketing independence, unique label brand identities” and an entrepreneurial and competitive spirit, Grainge continued. The efficiencies, he said, will “generate more impactful support for promotion, distribution, audience monetization, D2C, e-commerce and other areas.”
In its fiscal year 2023, UMG earned a net profit of 1.26 billion euros ($1.37 billion) on revenues of 11.11 billion euros ($12 billion), the company said.
Layoffs at UMG have been telegraphed for months, ever since Grainge said in a third-quarter earnings call last October that UMG would need to “cut to grow.” Rumors further began to circulate in early January, when Grainge noted in his New Year’s memo to staff that despite UMG being the “most successful company in the history of the music industry,” the company would “further evolve our organizational structure to create efficiencies in other areas of the business, so we can remain nimble and responsive to opportunities as they arise, while also taking advantage of the benefits of our scale.”
The impending layoffs were more explicitly acknowledged on Jan. 12, after Bloomberg reported that UMG would be cutting hundreds of jobs sometime in the quarter. In response, a UMG spokesperson released a statement that echoed Grainge’s note, including that the company would “maintain our industry-leading investments in A&R and artist development,” while also promising to continue “investing in future growth — building our e-commerce and D2C operations, expanding geographically, and leveraging new technologies.”
Things then came into clearer focus on Feb. 1, when Grainge announced in an internal memo that Universal would be restructuring its label operations, adopting a loose East Coast-West Coast operation wherein Republic Records co-founder/CEO Monte Lipman would begin to oversee Republic, Def Jam, Island and Mercury, and Interscope Geffen A&M chairman/CEO John Janick would take responsibility for Interscope, Geffen, Capitol, Motown, Priority, Verve and Blue Note. Days later, Capitol Music Group chair/CEO Michelle Jubelirer announced she was stepping down from her post and was replaced by Geffen president Tom March as chairman/CEO of Capitol and Universal Music Publishing Group veteran Lillia Parsa joining as co-president alongside Arjun Pulijal.
Still, the threat of layoffs continued to loom, with many staffers unsure of their positions and unclear as to when the cuts would arrive. The first phase of the redesign announced today will be “execute[d] on immediately,” according to a press release, though the scale in terms of people remains unclear.
UMG is not alone in instituting layoffs in recent months. On Feb. 7, Warner Music Group (WMG) announced simultaneously that it had just recorded its best quarter in its history and would also be laying off 10% of its staff, or some 600 people, and offloading its owned and operated media properties in an effort to save around $200 million that it said it would reinvest in the company. That itself came less than a year after then-new WMG CEO Robert Kyncl announced a 4% staff reduction, affecting some 270 people, “in order to set us up for long-term success.” Cuts at other large record companies are also expected, sources say.
The broader music and media industry is also in the midst of a brutal run of layoffs: Atlantic Music Group, SiriusXM, Amazon Music, TikTok Music, CAA, Discord, Meta, Downtown, YouTube, TIDAL and Spotify have all undergone layoffs in just the last year alone, to name just a few, some of them more than once.
Atlantic Music Group chairman/CEO Julie Greenwald announced layoffs of about two dozen people Monday (Feb. 26), primarily in the radio and video departments, in an internal memo to staff obtained by Billboard. As part of the announcement, Greenwald also said the company would be “bringing on new and additional skill sets in social media, content creation, community building and audience insights,” with the goal of “dial[ing] up our fan focus and help[ing] artists tell their stories in ways that resonate.”
Greenwald, who has been at Atlantic Records for 20 years, was named chairman/CEO of the newly-formed Atlantic Music Group in October of 2022, with oversight of Atlantic Records and its subsidiaries (Atco, Big Beat, Canvasback) as well as 300 Elektra Entertainment, which includes 300, Elektra, Fueled By Ramen, Roadrunner, Low Country Sound, DTA and Public Consumption. In that role, she is still co-chair/COO of Atlantic Records alongside co-chair/CEO Craig Kallman.
“Our artists today need more support from us than ever — in a world that’s getting noisier, faster, and more fiercely competitive,” Greenwald wrote. “We have to do more, but at the same time, our approach has to be authentic, bold, and bespoke to individual artists. We can’t impact culture if we don’t have the right mix of people who live that culture. That’s why we need dedicated teams of multi-talented, ambidextrous people — our ‘SWAT teams’ — who encircle the artist and do everything possible to help achieve their full potential.”
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The news comes three weeks after Warner Music Group CEO Robert Kyncl announced that WMG would be cutting its staff by 10%, or some 600 employees, amid a broader reallocation of resources that will involve selling its owned and operated media properties, such as HipHopDX and Uproxx. That move came the same day that Warner announced it had had its best quarter ever, with revenue up 17% to $1.75 billion, and that the moves would be about freeing up some $200 million to reinvest in the company.
However, Greenwald made a point to write that this move was not about merging or shuttering labels, but about repositioning the label group for the future. “We’ve all heard the same industry rumors about labels being reduced or merged into one another. I can tell you: this is not that,” she wrote. “We’re deeply committed to the unique cultures across our labels, led by 300, Elektra and Atlantic. Craig, Kevin [Liles, CEO of 300 Elektra], and I passionately believe these identities are crucial to attracting great artists and building great careers. We want artists to be choiceful about the culture and team they belong with, just as we’re thoughtful about deciding which artists we’re signing.”
Read Greenwald’s full note to staff below.
Dear Atlantic, Elektra and 300,
Two weeks ago, during the all hands call you heard Robert and Max talk about the evolution of our music company. They tasked us last year to examine our staffing and ask the tough question, how do we achieve maximum impact for our artists in this ever changing landscape?
As hard as it is to say goodbye to our friends and valued colleagues, it is critical that we keep retooling the company and add new resources and skill sets to our business units. I have now been at Atlantic for 20 years. The company has grown and evolved tremendously, because we have not been afraid to implement change and add new marketers, new A & R, new data and research and even new labels. Always evolving but with a consistent North Star : sign the best musicians and commit to the hardest work of building real careers through true artist development.
Our artists today need more support from us than ever – in a world that’s getting noisier, faster, and more fiercely competitive. We have to do more, but at the same time, our approach has to be authentic, bold, and bespoke to individual artists. We can’t impact culture if we don’t have the right mix of people who live that culture. That’s why we need dedicated teams of multi-talented, ambidextrous people – our ‘SWAT teams’ – who encircle the artist and do everything possible to help achieve their full potential.
The changes we’re making today are primarily happening in our radio and video teams. We’ll preserve our industry-leading position in those areas, while bringing on new and additional skill sets in social media, content creation, community building and audience insights. This will allow us to dial up our fan focus and help artists tell their stories in ways that resonate.
As part of this shift, I’m sorry to say about two dozen people will be leaving us from across our three labels and their imprints. We’ve already informed everyone who is impacted. I know we will all support each other, even more than usual, and I deeply appreciate your empathy and understanding.
We’ve all heard the same industry rumors about labels being reduced or merged into one another. I can tell you: this is not that. We’re deeply committed to the unique cultures across our labels, led by 300, Elektra and Atlantic. Craig, Kevin, and I passionately believe these identities are crucial to attracting great artists and building great careers. We want artists to be choiceful about the culture and team they belong with, just as we’re thoughtful about deciding which artists we’re signing.
Right now, there’s incredible music coming through from artists across the entire group. We have some of our biggest superstars returning, and some extraordinary new artists we’re building in a very real way. We’re taking the right step into the future, and I hope you’ll continue to share your ideas with senior management so we can continually improve.
Thank you.
Julie
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Employees at VICE were informed that the media group is stepping back from online news and preparing a round of heavy layoffs.
On Thursday (February 22), VICE News CEO Bruce Dixon sent out an internal memo informing employees that the media company would no longer be publishing on its flagship news site. “It is no longer cost-effective for us to distribute our digital content the way we have done previously,” Dixon wrote. “As part of this shift, we will no longer publish content on vice.com, instead putting more emphasis on our social channels as we accelerate our discussions with partners to take our content to where it will be viewed most broadly.”
There was more to the stunning development. “With this strategic shift comes the need to realign our resources and streamline our overall operations at VICE,” Dixon added. “Regrettably, this means that we will be reducing our workforce, eliminating several hundred positions. This decision was not made lightly, and I understand the significant impact it will have on those affected. Employees who will be affected will be notified about next steps early next week, consistent with local laws and practices.” The moves would not affect Refinery29, with the women’s lifestyle brand and website that Vice acquired in 2019 continuing as a standalone business.
The news reflects a stunning fall for VICE, which began as a publication covering punk rock and alternative music in Montreal in the 1990s founded by Suroosh Ali, Shane Smith, and Gavin McInnes who would go on to found the Proud Boys, the fascist organization that has aligned itself with the American far-right. At its peak, the Brooklyn-based company delivered news in a highly independent format with correspondents across the globe in addition to original programming such as Most Expensivest hosted by 2Chainz and F—- That’s Delicious by Action Bronson. The “Easy Rider” rapper took to social media on Friday, saying: “JUST WANTED TO MAKE SURE YA’LL KNOW I NEVER STOPPED MAKING F—K THATS DELICIOUS BECAUSE VICE IMPLODED.”
Representatives for VICE declined to comment when contacted by the press. The news comes amid several media groups announcing their downsizing measures such as Pitchfork and GQ, and Complex Media being sold off to the Ntwrk e-commerce platform. They joined news outlets such as The Washington Post, the Los Angeles Times, CNN, and ABC News which had initiated their cuts in recent weeks and months.
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BuzzFeed is selling off Complex Media to an e-commerce platform to firm up its financial footing and also announced company-wide layoffs.
According to reports, BuzzFeed has sold off Complex Media to the Ntwrk e-commerce platform. The group announced the sale on Wednesday (February 21), which cost $108.6 million in an all-cash deal. Universal Music Group will serve as a strategic partner in the deal, with Jimmy Iovine, Goldman Sachs, and Main Street Advisors serving as investors. The key franchises of Complex including First We Feast, and Hot Ones, will remain under BuzzFeed Inc.’s umbrella. Ntwrk released a video reel announcing the acquisition and their plans of the new company being “an e-commerce platform anchored in sneakers, streetwear and collectibles with content and music.”
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The deal also includes BuzzFeed receiving $5.7 million for Complex’s use of their New York offices in addition to “severance- and other employment-related costs.” BuzzFeed also announced that there would be a round of layoffs to reduce costs, expected to cull about 16% of remaining employees. It’s the second such round since last April when BuzzFeed closed its news division and let go of 180 employees.
“The sale of Complex represents an important strategic step for BuzzFeed Inc. as we adapt our business to be more profitable, more nimble and more innovative,” said BuzzFeed Inc. CEO Jonah Peretti in a press release. “This is also an opportunity to unlock greater value for the Complex brand by combining it with Ntwrk’s expansive commerce-driven business.” BuzzFeed originally acquired Complex Media in 2021 for a price tag of $294 million. The brand said it will provide further details on its restructuring on February 28.
“Complex has been a beacon of culture and innovation for over two decades,” Ntwrk co-founder Aaron Levant said in a statement. “My journey with Complex began as an admirer of their original magazine in 2002 and it has now come full circle as I step into the leadership role. Alongside this impressive team, we will create the definitive global content, commerce, and experiential platform of convergence culture.” Interscope Geffen A&M and Capitol Music Group have already declared intentions to work with the new company. “Combining the power and reach of Complex with the Ntwrk engine serving creators across music, fashion, and art will be transformative for the next generation of consumer technology,” Iovine said in a statement concerning the deal.
Eleven months after SiriusXM cut 8% of its workforce, the company announced on Monday (Feb. 12) that it will eliminate another 3% of its staff. The layoffs will impact about 170 jobs based on the company’s head count of 5,680 full-time and part-time employees as of Dec. 31, according to its 2023 annual report.
The cuts will affect every team and business unit and will enable SiriusXM to invest in its content, marketing and technology platform, a company spokesperson told Billboard.
In a memo to staff announcing the cuts, CEO Jennifer Witz used much of the same language that executives at Universal Music Group, Warner Music Group and Spotify employed to explain decisions to restructure those companies and reduce headcount. Not only is SiriusXM reducing its salary expense, but it’s also building for the future and investing in new technologies.
“We made significant progress on the transformation of our business in 2023, but we have just begun to scratch the surface of what is possible here at SiriusXM,” Witz wrote in the memo. “To continue on our path to future subscriber growth and sustain our Company’s success as the competitive landscape evolves, it’s imperative that we become even more efficient, agile, and flexible. Therefore, today we are making several organizational changes, including the difficult decision to eliminate certain roles, which will allow us to move faster and collaborate more effectively in support of our long-term objectives. From uniting teams and better aligning initiatives, to investing in new technologies that will power our transformation, we are focused on increasing efficiencies and redeploying resources to support the strategic priorities of our business.”
Once-dependable revenue growth has been harder to find as many consumers shift their listening to streaming services. In 2023, SiriusXM’s revenue fell 0.6% to $7.95 billion as the company lost 445,000 self-pay subscribers to its satellite radio service. Despite reducing its headcount to 5,680 from 5,869 during 2023, general and administrative expenses increased 5% to $550 million last year, and its operating margin fell from 22.6% to 21.7% .
SiriusXM is hopeful its revamped streaming app — and a $9.99-per-month price tag, which is lower than the satellite radio service — will attract new subscribers and mark the return of revenue growth. The new app launched Dec. 14 and “is yielding promising signs of improved engagement,” Witz said during the Feb. 1 earnings call. The apps personalization features and reduced latency, along with a redesigned SiriusXM logo, have created “a positive lift in brand perception among the growth audience segments we are looking to attract,” she added.
Investors tend to react positively to news of layoffs made to reduce costs and speed a transformation. Shares of SiriusXM rose as much as 3.1% to $5.05 Monday morning and stood at $5.01, up 2.1%, in the mid-afternoon.
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Warner Music Group announced that they were going to commence layoffs within the next few weeks amid a pivot away from digital media.
On Wednesday (February 7), Warner Music CEO Robert Kyncl sent out a memo to the staff informing them that the company was going to lay off 10% of its staff, or 600 people in the weeks ahead. The announcement comes a day before the release of the company’s earnings report on Thursday (February 8). The digital media division will be the hardest hit, with Uproxx, HipHopDX, IMGN, and Interval Presents as Warner Music seeks to “double down on core business.”
“These are dynamic platforms, but they operate outside our core responsibilities to our roster,” Kyncl said in the memo. It is believed that HipHopDX and Uproxx will be sold off to potential buyers, while the podcast brand Interval Presents and social media publisher IMGN will be wound down. “This is a pivotal moment in the evolution of this great company,” Kyncl continued. “We’ve already begun to inform many of the impacted employees, and the vast majority will be notified by the end of September 2024.” He wrote that in knowing that the news is “unsettling,” that “Warner Music would be “moving as thoughtfully and respectfully as possible, so you have the critical information you need, and we’ll support you through this transition.”
The memo also contained numbers from the earnings report showing that Warner Music feels they’re making the decisions from a stronger position. “So, as part of that plan, we’ll be realizing approximately $200 million in annualized cost savings by the end of September 2025. The majority of these savings will be reinvested, putting more money behind the music,” Knycl wrote, pointing to an 11% revenue growth for the final quarter of 2023. The other preliminary data released showed a rise in net income of $193 million versus $124 million in the quarter at that time last year.
The news of the layoffs does come at an uncertain time for the music and media industry which has suffered some similar stunning cuts. Earlier this month, Condé Nast announced that Pitchfork would be folded into GQ Magazine, and Sports Illustrated announced recently that they had laid off most of its staff. The Sports Illustrated Union and the NewsGuild of New York are currently suing the sports periodical’s parent company, The Arena Group.
Warner Music Group announced Wednesday (Feb. 7) that its quarterly revenue grew 17% for the period ended Dec. 31, 2023, up 11% in normalized revenue, to $1.75 billion, its highest quarterly mark ever, ahead of its earnings call Thursday. At the same time, CEO Robert Kyncl announced in an internal memo to staff obtained by Billboard that the company will be reducing its workforce by 10%, or some 600 people, as part of a plan to free up $200 million in cost savings to reinvest into the company.
Much of that workforce reduction, Kyncl wrote, will come in the form of Warner’s owned and operated media properties — such as Uproxx and HipHopDX, which it acquired in August 2018 — as well as in corporate and support roles. “Earlier today, we began exiting our O&O media properties, as well as our in-house ad sales function,” Kyncl wrote. “These are dynamic platforms, but they operate outside our core responsibilities to our roster. We’re in an exclusive process for the potential sale of the news and entertainment websites Uproxx and HipHopDX, with more to say on that soon. After a thorough exploration of alternatives, we’ve decided to wind down the podcasting brand Interval Presents and social media publisher IMGN.”
Kyncl further added that Warner is making the move from “a position of strength,” noting that the company currently has five of the top 10 songs on the Hot 100, “and that’s the smart time to change, innovate and lead. Music is constantly morphing, so we need to morph with it.”
That $200 million in cost savings will be realized by the end of September 2025, Kyncl said in the memo; some of those laid off have already begun to be informed, while the “vast majority” will be notified “by the end of September 2024,” he writes.
“As we carry out our plan, it’s important to bear in mind why we’re making these difficult choices,” the memo continued. “We’re getting on the front foot to create a sustainable competitive advantage over the next decade. We’ll do so by increasing funding behind artists and songwriters, new skill sets, and tech, to help us deliver on our three strategic priorities,” which he says includes growing engagement with music, increasing the value of music and evolving how Warner’s teams work together.
Read Kyncl’s full note to staff below.
Hi everyone,
We just finished our first All Hands of 2024 from LA.
This is a pivotal moment in the evolution of this great company, so I wanted to make sure you heard about it directly from me. As I outlined in my note last month, 2024 is a year during which we will double down on our core business and move at an increased velocity to seize the incredible opportunities for music in the new world.
This week, our recording artists make up five of the top 10, and our songwriters have six of the Top 10, on the Billboard Hot 100. Today, we’re revealing our latest quarterly results: we grew 11% in normalized revenue. And with growing momentum in Recorded Music streaming and excellent results in Music Publishing, we hit our highest quarterly revenue ever. We’re in a position of strength, and that’s the smart time to change, innovate, and lead. Music is constantly morphing, so we need to morph with it.
Today, we’re announcing a plan to free up more funds to invest in music and accelerate our growth for the next decade. To do that, we have to make thoughtful choices about where we put our people, resources, and capital. So, as part of that plan, we’ll be realizing approximately $200 million in annualized cost savings by the end of September 2025. The majority of these savings will be reinvested, putting more money behind the music.
Our plan includes reducing our workforce by approximately 10%, or 600 people – the majority of which will relate to our Owned & Operated media properties, corporate and various support functions.
We’ve already begun to inform many of the impacted employees, and the vast majority will be notified by the end of September 2024. I recognize this is unsettling news. To the people who will be leaving us: you deserve a heartfelt thank you for your hard work and dedication. We’re fortunate that you’ve been part of the team. We’ll be moving as thoughtfully and respectfully as possible, so you have the critical information you need, and we’ll support you through this transition.
Earlier today, we began exiting our O&O media properties, as well as our in-house ad sales function. These are dynamic platforms, but they operate outside our core responsibilities to our roster. We’re in an exclusive process for the potential sale of the news & entertainment websites Uproxx and HipHopDX, with more to say on that soon. After a thorough exploration of alternatives, we’ve decided to wind down the podcasting brand Interval Presents and social media publisher IMGN. Maria and I continue to discuss the ongoing evolution of WMX, and how best to further improve our services to artists and labels, and she’ll update the team in the coming weeks.
As we carry out our plan, it’s important to bear in mind why we’re making these difficult choices. We’re getting on the front foot to create a sustainable competitive advantage over the next decade. We’ll do so by increasing funding behind artists and songwriters, new skill sets, and tech, to help us deliver on our three strategic priorities:
Grow the engagement with Music
Discovering and developing artists and songwriters is at the heart of everything we do. We’ll turbocharge our efforts and investments, with additional focus on high growth geographies and vibrant genres, as well as using our data and insights to help original talents cut through the increasing noise, and taking a holistic global approach to maximizing the potential of their catalogs.
Increase the value of Music
This is one of our industry’s largest and most complex opportunities and one that we’re working on diligently, whether it’s new DSP deal structures or building superfan experiences to help artists connect directly with their most passionate followers.
Evolve how we work together
In order to grow at an accelerated pace, we need to structure our organization so that we can grow efficiently and continue to invest more into music at the same time. That requires being intentional about where centralized shared functions make sense, versus where they are best fully dedicated. This will empower subject matter experts, while scaling our resources. We already made moves in this direction by centralizing our technology, finance and business development teams last year.
Above all, we’re positioning ourselves to be first, to be different, and to be exceptional. I – and the entire leadership team – will be keeping you updated as we make progress. In May, we’ll hold our next All Hands meeting, which we’ll devote to our best new music, as well as our most promising projects.
Thank you for your understanding, passion, and determination. We’re in an amazing industry, we’re partnered with many extraordinary artists and songwriters, and now is the time for us to pioneer the future.
Robert
Since Laura Gonzalez lost her job as a Spotify software engineer in December, when the streaming giant cut 1,500 employees in its third round of 2023 layoffs, she has struggled to reassert herself in a shifting music business.
As companies like Universal Music Group and BMG downsize for strategic purposes, Gonzalez has observed through job listings and interviews — that public-relations, media and streaming jobs are thinning out while the social-media and ticket-sales sectors remain more or less robust. “It is scary, I’m not going to lie,” says Gonzalez, a San Diego singer and guitarist who fronts shoegaze band Memory Leak. She adds that the “competition is insane,” noting she spent her one-year Spotify career building revenue streams for artists beyond royalties. “I found myself having to study and refresh on topics I had not thought of since I was in university — data structure and algorithms.”
From the point of view of music-business job-seekers, the employment landscape has taken a recent turn into the unknown. For the last several years, boosted by streaming growth and a spike in demand during COVID-19 home quarantine, labels, DSPs (digital service providers) and other streaming-focused companies were expanding and hiring. But UMG’s chairman, Lucian Grainge, has warned staff for months that the world’s biggest label is on the brink of severe cost-cutting.
For that reason, according to Pieter Wolter, founder of The Music Recruiters, an Amsterdam-based company that recruits people in the music business and connects them to job opportunities, job-seekers with music-business experience in human resources, finance or other transitional skills might consider recession-proof sectors such as health insurance. He expects music-business job growth in artificial intelligence, data analytics and the metaverse, but perhaps not imminently.
“It’s not like all these people who are laid off will be able to transition easily into those areas. This will depend on network and experience,” he says. “It’s clear the music industry is changing. There’s not a single area where I’m aware of super-strong hiring, like you could have seen in the past at digital distributors — or technology bursts you sometimes see.”
There are bright spots in the industry. Jon Loba, BMG’s new president of frontline recording, declared last month that he would immediately start beefing up his A&R team in Los Angeles. (In October, the Berlin-based label and publisher laid off 30 staffers as part of what CEO Thomas Coesfeld called “a strategy for future growth.”) And record-setting tours by Taylor Swift and Beyoncé have helped to create “lots of great growth opportunity for years to come” on the live side, Michael Rapino, president/CEO of Live Nation, told investors last August.
“Jobs will look different and there will be more competition, but I don’t think we need to completely freak out,” says Andreea Magdalina, Coachella’s community director and founder of shesaid.so, a music-business community of women and nonconforming gender people that hosts an online job portal. “What’s tough is people looking for jobs right now, because things are shifting really quickly. The market is going through a consolidation phase.”
For now, though, online recruiters are seeing bleakness in the business. (In addition to recent layoffs at DSPs and labels, music journalism has taken a devastating hit, with Conde Nast downsizing Pitchfork and newspapers such as the Los Angeles Times firing entertainment writers and editors.) Recent music-related opportunities on ZipRecruiter, according to Julia Pollak, the company’s chief economist, have been in teaching, therapy or junior-level positions.
“There’s not tremendous growth happening in these industries,” she says. “The sort of high-paying music-manager kind of roles that are the most attractive are in very short supply.”
Noticing the same trends over two months of unemployment, Gonzalez has broadened her job search: “I’m hopeful that I can find something where I can make an impact, whether it’s in the music industry or a different industry. It’s all a learning path.”