Sony, BMG Merger & Cuts – Major Pain Only Stockholders Gain
From The Hollywood Reporter:
Sony, BMG reportedly plan to cut 25% of staff
LONDON – Sony Music and BMG plan to shed up to 2,000 jobs or about 25% of their combined work force once they get regulatory approval for their merger, the Financial Times reported Friday. The newspaper said Sony Music, a division of Japanese electronics giant Sony Corp., and BMG, a unit of German media company Bertelsmann AG, will begin work on a reorganization next week after European and U.S. regulatory approval of the deal. A Sony spokesman contacted in New York had no immediate comment, and a BMG spokesman could not be reached for comment. The Financial Times, citing people familiar with the situation, said executives of the merged group, which will be known as Sony BMG, hope to achieve the bulk of the job cuts by next June. (Reuters)
COMMENTARY: We’ve always thought that many label staffs were bulging with middle management and overpaid hacks. But we’ll place bets that at the end of this round of bloody cuts many of the same useless people remain. The junior staff laboring in the trenches will be let go and only the suits will be left to promote and sell 75% as many releases with 25% less staff. Yeah, that’s a business model.