Report: EMI Plans 'Radical' Cost Cuts, More Layoffs

Authored by Mark Hefflinger on February 8, 2010 - 10:06am.

London - Major record label EMI is planning "radical cost cuts, including a further reduction in its 3,500-strong workforce," in a bid to make the company more attractive to investors, the Telegraph reported. Terra Firma, the private equity firm that acquired EMI for $4.7 billion before the recession hit, is seeking an additional more than $160 million from investors, in order to meet loan repayment deadlines and prevent a possible takeover by lender Citigroup.

The cost-cutting initiative expects to shave "tens of millions of pounds" in costs, and include another round of layoffs -- following on the 3,000 staff laid off in 2008.

The Telegraph reports that EMI's plan envisions growing digital from 25% of total revenues to 75% within five years, and that the company plans to bolster its EMI Music Services licensing and merchandising unit.

"[The five-year business plan] will involve both an acceleration in revenues coming from product innovation at EMI Music Services and some cost reductions from the introduction of new systems and technology and the elimination of some duplication," EMI chief executive Elio Leoni-Sceti told the Telegraph.

"This will confirm our vision to evolve into a digitally-led music company.

Related Links:
http://snipurl.com/ub2ki (Telegraph)

http://snipurl.com/ub2sp (DMW previous coverage)

http://www.emi.com