Photo Credit: Josh Appel
Universal Music Group is reportedly preparing to cut ‘hundreds’ of jobs in Q1, with UMG’s recorded music — the company’s largest division — to be ‘hit the hardest.’
Bloomberg reported on Friday, January 12, that Universal Music Group is planning a major round of layoffs this quarter, according to those close to the matter. Universal Music will cut “hundreds” of jobs, with the company’s largest division, recorded music, being “hit the hardest.”
“We continue to position UMG to accelerate its leadership in music’s most promising growth areas and drive its transformation to capitalize on them,” said a spokesperson for UMG on Friday. “Over the past several years, we have been investing in future growth — building our e-commerce and D2C operations, expanding geographically, and leveraging new technologies.”
“While we maintain our industry-leading investments in A&R and artist development, we are creating efficiencies in other areas of the business so we can remain nimble and responsive to the dynamic market, while realizing the benefits of our scale.”
Boyd Muir, Universal Music Group’s EVP and CFO, introduced the company’s forthcoming cost-cutting plan during Universal’s Q3 2023 earnings call, saying, “We are currently conducting a careful review of our cost base, which we will complete over the coming months, and we will update you when appropriate about an anticipated cost-savings program to commence in 2024.”
“We remain focused and optimistic as we continue to execute on the growth prospects that lie ahead for UMG,” Muir added. “We see enormous opportunity for value creation, both for our artists and for the company, as we advance our artist-centric initiatives and work to further capture the value of the engagement being driven by our unparalleled roster of artists and songwriters.”
Muir said the planned 2024 cuts were expected to improve the company’s EBITDA margin once implemented, while also noting that UMG will aim to better “capture opportunities we see in the marketplace” throughout the year. The key objective in 2024, as summed up by UMG Chairman and CEO Lucian Grainge, will be to “cut to grow — cut overheads in order to grow elsewhere.”
At year’s end 2022, UMG had a global headcount of just under 10,000 employees, up by 487 people year-on-year. Of those, 9,286 were permanent employees, while 706 were temporary hires. UMG employed 4,161 people in Europe in 2022, the biggest headcount in a single region, at 42% of its workforce. The second largest employment region was North America, where 39% of its global headcount (3,951 employees) were based in 2022.
