Damaged by the digital revolution, British music company EMI has confirmed it is making major cuts.
The new owner, Guy Hands, who heads private equity company Terra Firma, said up to 2,000 people are to lose their jobs in a restructuring plan designed to save around 265 million euros a year.
Music journalist and broadcaster Paul Gambaccini explained that EMI has the same problems that are facing the entire industry: “The music business is changing very rapidly. As you know CD sales are really diving, and internet download sales are really increasing, but the problem is they are not making up for the fall of CDs – they don’t cost as much and not as many people are downloading as used to be buying.”
EMI is the third biggest music group, with 13.5%of the world market last year. Vivendi Universal is the largest with 29%, followed by Sony BMG at just over 24% of the market and Warner Music is slightly smaller than EMI.
The British company has however struggled more than the other major labels recently with fewer hit records and lower sales in the United States, the world’s largest music market.
Big name acts like Kylie Minogue have stayed with the label since the Terra Firma takeover but others, including Paul McCartney and Radiohead, have quit as they are upset about the way the company is being run and the cutbacks.