Business News Labels & Publishers

Major label job cuts incoming?

By | Published on Friday 25 September 2009

Digital Music News are speculating that some senior US record company execs could be for the chop in the next couple of months. The consensus seems to be that at least one of the major record companies is regretting entering into six figure plus deals with some of its senior execs a few years back when things were a bit more rosey than they are now, and are therefore thinking of cutting some high earners loose to help improve the bottom line.

Given that most of these six figure plus old school record label dudes were the guys who threw millions at pointless file-sharing lawsuits and self-harming digital rights management technology earlier this decade when anyone who had ever turned on a computer knew such policies were short-sighted and pointless, they probably should have all been fired years ago.

Though, I suppose, EMI bosses might caution against cutting loose every senior exec – such a strategy post Terra Firma’s acquisition of the London-based major had mixed results for them. The old guys may be out of their depth in the digital age, but some of them boast the sorts of cosy artist/manager relationships needed if you’re trying to relaunch yourself as a 360 degree artist services business, something that requires persuading artists they might want to work with your label on live, merchandise and sponsorship projects.

DMN is vague about how many senior execs could be receiving their P45s (or whatever you get in America), and which major or majors this effects, though they say both Sony and Warner have been mentioned (the former, though, has been quietly downsizing its top table for a while now). They quote a source thus: “These types of [six figure] compensation packages were signed in an earlier time, a different frame of mind; they can no longer be sustained”.



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