Universal Music Group (UMG) is set to implement significant layoffs in Q1 2024, affecting ‘hundreds’ of employees, particularly in its recorded music division according to reports.
As of December 31, 2022, UMG’s global headcount stood at 9,992 employees, registering an increase of 487 individuals compared to the previous year.
The recorded music giant, known for its diversified workforce, revealed that 51% of its employees were women, with the majority based in Europe (42%) and North America (39%).
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This move aligns with industry trends, as major music rightsholders, including Warner Music Group and BMG, have also undertaken strategic cost-cutting measures recently.
- UMG confirmed on its Q3 2023 earnings call in October that it plans to “cut to grow” in 2024, with Boyd Muir, the company’s EVP and CFO, noting that a detailed review of the cost base was underway.
- The upcoming cost-savings program is expected to enhance UMG’s EBITDA margin and focus on optimizing resources to capture market opportunities while advancing artist-centric initiatives. Chairman and CEO Sir Lucian Grainge summarized the strategy as “cut to grow,” emphasizing the goal of reducing overheads to fuel growth in other areas. UMG reported robust Q3 2023 revenues of EUR €2.752 billion ( $2.995 billion), with a 9.9% YoY increase at constant currency.
- The recorded music segment contributed €2.037 billion ($2.21 billion), showcasing a 5.2% YoY growth at constant currency, driven by a 13% YoY increase in subscription streaming revenues, reaching €1.057 billion ($1.15 billion).
The layoffs are part of UMG’s broader plan to streamline operations and reallocate resources for sustained growth in the evolving music landscape.
What you should know
Last week, Amazon.com Inc. announced significant job cuts across its TV and film studio and Twitch streaming service.
Additional companies engaging in or planning layoffs include Comcast Corp.’s NBC News, Discord Inc., and Walt Disney Co.’s Pixar studio.
Universal Music’s counterparts have also undergone job cuts in the past year. Warner Music Group Corp., for instance, reduced its staff by approximately 4% in March of the previous year, aiming to capitalize on future opportunities, as communicated in a memo by CEO Robert Kyncl.
As both Warner and Universal entered the public domain within the last five years, heightened expectations for growth have been placed on their leaders.
Universal Music has enjoyed a string of successes with chart-topping releases from artists like Taylor Swift, the Weeknd, Billie Eilish, and Olivia Rodrigo.
