Universal Music cuts 1,350 jobs

NEW YORK (UMG Website/NYSE announcement) - Universal Music, the world's largest record company, is to slash 1,350 jobs - or 11% of its workforce - in order to cope with a protracted slump in sales. Global music sales have been in decline for more than three years, with the industry laying the blame on illegal song swapping over the internet and home CD burning.
Universal says the cuts will save it $200m a year and leave the firm in a good position to take advantage of any turnaround.

"[Universal Music] is in the process of instituting significant cost-cutting initiatives that take into account the realities of the declining music market to further rationalize the company's cost structure around the world," the firm said in a statement.

The company, which has operations in 71 countries, says 190 job cuts will come in North America but has not yet specified where the other losses will be.
Universal is home to stars such as Eminem and Sheryl Crow and is part of France's struggling media giant Vivendi.

Vivendi recently sold most of its US entertainment assets to General Electric's NBC but vowed to hang onto the record firm, banking on a recovery in music sales. Universal's main competitors - including Sony, Warner Music and EMI - have also struggled to cope with falling sales and there has been speculation that the industry will consolidate in order to cut costs.
But Universal Music already controls about 30% of the US music market, effectively ruling itself out of any merger talks.