After weeks of rumors, Universal Music Group has confirmed that it will be laying off an unspecified but significant number of employees in the coming weeks. The company’s recorded-music division is said to be receiving the brunt of the layoffs.
UMG chairman Lucian Grainge mentioned forthcoming layoffs in the company’s October earnings call; on Friday, Bloomberg was first to report the scale, although rumors had gained momentum in the last several days and other sources tell PvNew the numbers will be in the hundreds.
A Universal rep said in a statement: “We continue to position UMG to accelerate its leadership in music’s most promising growth areas and drive its transformation to capitalize on them.Over the past several years, we have been investing in future growth—building our ecommerce and D2C operations, expanding geographically, and leveraging new technologies.While we maintain our industry-leading investments in A&R and artist development, we are creating efficiencies in other areas of the business so we can remain nimble and responsive to the dynamic market,while realizing the benefits of our scale.”
While the Bloomberg article painted an overly and arguably inaccurately bleak picture of the music business’ current macro outlook, there’s little question that the industry is seeing a leveling-off in growth since streaming revived its fortunes in the mid-2010s, and since the pandemic furthered that growth due to people sheltering at home, with more leisure time than usual, during much of 2020 and 2021.
During the October earnings call, Grainge said, “We will cut overhead in order to grow it elsewhere. We do have experience in managing the business, in managing the teams, and the businesses within that make up the group, and we’ve got a plan.”
Universal is hardly the only major to be hit with layoffs in recent months: Warner reduced staff by around 4% in March and new CEO Robert Kyncl laid out plans in an internal memo last week for a broad change in the company’s focus over the next 10 years, and sources tell PvNew that layoffs at Sony Music, the third major music group, may be imminent as well.
