Bad Days Ahead At EMI

New owners Terra Firma are enforcing tight restrictions on new artist signings and promotion budgets at EMI and major job cuts will follow according to the Financial Times and other sources. 

Deep job cuts among EMI’s 5,500 person workforce can be expected in 2008. Sources say that the cuts will come primarily from what Terra Firma sees as overlapping marketing and administrative bureaucracies at individual labels and not at A&R.  Effected managers and artists are already expressing displeasure at delivering new releases to a diminished staff who may be unable to promote them properly.

Has Guy Hands forgotten that return on investment first requires investment?

COMMENTARY: While cuts in expensive middle and upper management are needed at most major labels, Terra Firma appears to be creating creating a self-fulfilling prophecy of failure.

Diminished marketing staffs leads to lowers sales and falling profits. Only by ramping up marketing, particularly in new and social media, does EMI have any hope of breaking new artists and saving its core business.