LONDON – The new owners of music label EMI Group -- home of the Rolling Stones, Coldplay and the Spice Girls -- said Tuesday that they plan to cut up to 2,000 jobs, or more than a third of its work force, in a restructuring aimed at offsetting the impact of falling revenue from CD sales and the departure of several of its major artists.
EMI said it hopes the restructuring of its recorded music division, to be completed in six months, will save up to 200 million pounds ($400 million) a year.
The company said sales, marketing, manufacturing and distribution would be combined in a single, global division. The changes will entail the loss of 1,500 to 2,000 jobs from the current work force of 5,500. About a third of the job cuts will be in Britain, where EMI is based, the company said.
The company did not provide details but said it intended to help its artists to make more money through sponsorship and other deals.
EMI's label's artists also include the Beastie Boys, Norah Jones and Kylie Minogue.
Private equity firm Terra Firma Capital Partners bought the company for 2.4 billion pounds ($4.9 billion) in August.
EMI has struggled more than the other major labels -- Sony BMG, Universal Music Group and Warner Music Group -- amid the decline of CD sales and the rise of digital music downloading. The company blamed disappointing North American results for a series of damaging profit warnings, but industry experts also pointed to EMI's lack of new music and internal control problems.
Last year's takeover by Terra Firma, a private equity firm led by financier Guy Hands, sparked speculation there would be a cull of less-profitable acts from the EMI roster. In a November memo to staff, Hands said in future EMI would be "more selective in whom we choose to work with."
Several of EMI's biggest acts have left the label in the last year including Paul McCartney and Radiohead.
In a move to allay discontent, EMI promised to focus more resources on A&R -- artists and repertoire -- and "developing a new partnership with artists, based on transparency and trust."
In a statement, EMI said it would help artists "monetize the value of their work by opening new income streams such as enhanced digital services and corporate sponsorship arrangements."
"We have spent a long time looking intensely at EMI and the problems faced by its Recorded Music division which, like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment," said Hands, Terra Firma's chief executive.
"We believe we have devised a new revolutionary structure for the group that will improve every area of the business. In short it will make EMI's music more valuable for the company and its artists alike."