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More jobs cuts likely in Allen’s grand plan to rescue EMI
By CMU Editorial | Published on Monday 19 April 2010
Hundreds more EMI staffers could be for the axe as part of the London major’s last ditch attempt to stop its bankers foreclosing on their multi-billion dollar loan.
As previously reported, recently appointed Executive Chairman Charles Allen has been putting together a report that it’s hoped will persuade investors in EMI owners Terra Firma to stump up the cash needed to meet a £120 million loan payment due in late May. He is trying to convince them that EMI management could still make the flagging music firm profitable, and that therefore now isn’t the time to cut their losses and bail on the major.
According to the Times, Allen is trying to show that EMI’s recorded music division could be making profits of £300 million a year by 2015. That will require not only a boost in income, probably in part by going through with the plan to licence out the major’s catalogue in the North American market, but also further cuts in overheads.
In fact, up to another £100 million may need to be cut from EMI’s running costs. While it is true that the other three majors have been quietly streamlining their operations since EMI’s last dramatic staff cull in 2008, the London-based major is probably still the most lean of all the big music firms. Another £100 million in cuts has therefore got to hurt.
But on the upside, the broadsheet says that Guy Hands, who it was thought had all but washed his hands of EMI, is increasingly confident he can raise enough new money to give the music firm two year’s grace with its bankers, giving Allen the time he needs to get things working.
Some reckon that EMI is benefiting from Hands’ growing feud with bankers Citigroup; as previously reported, he is suing them in relation to the advice they gave him ahead of his purchase of the music company. The Terra Firma chief is reportedly increasingly bitter regards how the US bank have treated him post-credit crunch, and he therefore sees rescuing EMI as one way to kick it to the shady bankers.
