Universal Music will cut 1,350 jobs in a restructuring aimed at saving $200 million a year in response to the lengthy slump in music sales.
The restructuring at the world's largest record company, which controls nearly 30 per cent of the US music market, is the latest sign of a crisis in the record industry, which blames a three-year slump in sales on Internet song-swapping and home CD-burning.
Universal began trimming its payroll earlier this year, eliminating about 550 positions around the world. But it plans to cut another 800 jobs, including 190 in North America, between this week and early 2004.
Universal Music is a unit of Vivendi Universal and home to such stars as Eminem, Sheryl Crow and Ludacris.
Universal Music had an operating loss of $42 million in the first half of 2003, while revenues fell 24.5 per cent to $2.2 billion in that same period.
In early 2003, Universal Music employed 12,200 people worldwide. After the restructuring, it will employ about 10,850 and expects to be better positioned for a turnaround when the industry recovers, it claimed.
Global music sales have tumbled almost 11 per cent in the first six months of the year, extending a three-year slump that has stepped up the pressure for consolidation.
The industry contraction has caused several of Universal's competitors - including AOL Time Warner Inc.'s Warner Music, Bertelsmann's BMG Entertainment, EMI Group Plc EMI Recorded Music and Sony's Sony Music - to explore possible mergers or joint ventures.