And so it begins. The first strand of the recently merged Universal/EMI to feel the impact of the merger is distribution in the US, where 50 staff have been let go.
According to Billboard, Universal merged EMI’s American distribution division with its own late last week, resulting in 50 redundancies, most from the former EMI Music Services unit. Insiders have told reporters that they’ve been informed there could be further job cuts to come in distribution in the next three months, though a senior Universal exec has denied those reports.
Some EMI distribution staff will move to new roles within the equivalent Universal Music department, mainly to manage the distribution of releases by Capitol, the main EMI label stateside which now operates as a division of the mega-major, and releases from which will be handled by Universal Music Group Distribution moving forward. That includes Joan Kane, Saul Shapiro, David Miller and Dominic Pandiscia, the latter formerly the head of what was EMI Music Services in North America.
In addition to the cuts in distribution, the EMI and Universal Nashville divisions were also merged last week, resulting in around ten further redundancies.
Confirming the cuts, Universal said in a statement: “Following our acquisition of EMI Recorded Music, UMG will be expanding key creative areas as part of our ongoing integration. While this restructuring will unfortunately result in some redundancies, it is essential to UMG becoming an even more agile and efficient company, not just for this year or the next, but for years to come. Our goal is to maximise the resources available for reinvestment in our labels so they can do what they do best: develop and promote artists, increase the output of new music and expand opportunities for digital innovation”.
Universal top man Lucian Grainge promised the major’s parent company Vivendi that he could find £100 million in cost savings by combining the Universal and EMI businesses, and remains committed to that pledge despite the mega-major having to sell off over half of EMI’s assets in Europe. Meaning plenty more of these kinds of announcements are expected in the next few months, though in Europe there is the added complication of the sell-off of those units being divested as part of Universal’s deal with European competition regulators.