Switzerland-based music industry roll-up, Utopia, has confirmed it is laying off around 15% of its current global workforce.
The plan, revealed in a company memo sent on Monday (April 17), will see around 100 jobs cut, reports Billboard.
The news comes less than six months after a previous round of layoffs at Utopia, which saw 20% of the company’s headcount – or around 230 positions – axed.
The impact of the loss of 300-plus jobs within half a year was expressed by Utopia Music’s CEO and founder, Mattias Hjelmstedt, in the latest memo, which you can read in full at the bottom of this report.
Wrote Hjelmstedt: “[This latest round of redundancies] is the most difficult decision we’ve had to make so far, and I fully appreciate that after these past few months this will be hard to read.
“If you are one of the affected individuals: Please know that this is in no way based on your individual performance – we hired you because we value you and you are great at what you do – this is about doing what is necessary to secure the future of the company.”
MBW recently broke the news that Utopia had sold music publishing platform Sentric to Believe just a year after Utopia itself acquired the firm. The sale to Believe valued Sentric at over USD $50 million.
In February, Utopia sold music industry directory and data platform, ROSTR, back to its founders Mark Williamson and Adam Watson, for an undisclosed sum.
In the same month, Utopia was sued by US music technology company SourceAudio, in a lawsuit accusing Utopia of reneging on an agreed acquisition deal.
“Together, we’ve very carefully reviewed our organization against our refocused product and commercial roadmaps, and specific needs, and must share the unfortunate news that, as part of this strategic shift, we need to say goodbye to around 15% of our Utopian colleagues. Our distribution companies are not affected by this review.”
Mattias Hjelmstedt, Utopia Music
Meanwhile, former Utopia CEO Markku Mäkeläinen exited the company in January after three years in the role.
Hjelmstedt took on the CEO role following Mäkeläinen’s exit, while announcing a new structure that saw former Downtown executive Roberto Neri confirmed as the new CEO of Utopia’s ‘Music Services’ division.
A mere 62 days after that announcement, Neri confirmed he was leaving Utopia to become CEO of the global publishing division of Believe.
In his memo to staff on Monday (April 17), Hjelmstedt said that Utopia’s distribution companies are not affected by the latest staff cuts.
Utopia’s distribution units include UK-based independent physical music distributor, Proper Music Group, which provides its distribution services to over 1,000 indie labels and service firms.
Utopia also owns Cinram Novum, which provides warehouse, fulfilment and distribution services to a number of labels, including Universal Muisc Group, Sony Music Entertainment and Belgium’s PIAS Recordings.
Hjelmstedt also addressed some concerns recently raised by Scandinavian news outlet Breakit including the non-payment of salary to some Utopia staff and that its Swedish company Utopia R&D Tech owes over 8 million SEK (approx $775,800) to the Kronofogden, the Swedish Authority in charge of debt collection.
“All outstanding tax debts have been cleared, including our financial obligations in Sweden,” Hjelmstedt said in the memo.
You can read the memo in full here:
Dear Utopians,
Since taking on additional responsibilities as your Executive Chairman, I’ve been committed to sharing the steps we must take for Utopia to become a profitable and sustainable business. The new leadership team and I have had to make some important, and sometimes very tough, decisions as part of this ongoing process. Today I need to share news of that nature.
Together, we’ve very carefully reviewed our organization against our refocused product and commercial roadmaps, and specific needs, and must share the unfortunate news that, as part of this strategic shift, we need to say goodbye to around 15% of our Utopian colleagues. Our distribution companies are not affected by this review.
Thomas and I created Utopia by combining two of our great loves – music and technology – and we’ve built it together with you. That’s why this is the most difficult decision we’ve had to make so far, and I fully appreciate that after these past few months this will be hard to read. If you are one of the affected individuals: Please know that this is in no way based on your individual performance – we hired you because we value you and you are great at what you do – this is about doing what is necessary to secure the future of the company. We’re truly sorry to see you go and feel both humbled and grateful for all the amazing work you have done for Utopia.
It’s been very hard to see how Utopia was treated last year and you already know how I feel about decisions taken that put us in a difficult situation. Additionally, like the rest of the tech industry, we’re facing challenges brought on by changed market conditions. We’ve seen several waves of redundancies from companies large and small – Meta, for example, recently announced its “year of efficiency” to cater to its long-term vision. Today’s market requires that companies that embarked on a hiring spree during “hyper growth” now restructure. The likes of Spotify, Microsoft, and PayPal (and so many others) now need to adapt to the new reality of focused sustainable growth – just like we have to at Utopia. We are a company that is not afraid to adjust when necessary. That means we take active decisions, however hard they may be, to ensure we can deliver our vision to serve the music industry with technology for processing royalties, distributing music, and facilitating Fair Pay for Every Play while reducing complexity for our customers.
Adjusting to these changes has been a big, but necessary undertaking. We’ve sharpened our strategic focus these past three months through targeted sales (ROSTR and Sentric) – bringing in further capital as an additional benefit – and we appointed a new, mature leadership team that’s equipped to move Utopia towards profitability. We have optimized our offering and already seen an uplift in customers – we have strong products on the market that we will continue to improve, a top-of-the-line platform, a world-class distribution arm that represents 98% of UK labels (including all majors), and a plan to first break even and then grow even further, sustainably. The legacy from last year is in the process of being cleaned up. All outstanding tax debts have been cleared, including our financial obligations in Sweden. We continue to actively work on this process to ensure that we never find ourselves in this position again. We’re humbled and grateful to all of you who stepped up to support this large, strategic shift, and have shown patience while we do so.
Soon we will share more information on commercial initiatives, deals, and sales strategies that will drive Utopia’s revenue growth. But for now, let’s allow ourselves time to reflect and give the great people that will unfortunately have to leave us a proper goodbye. Some colleagues will receive difficult news and some will lose teammates and friends, so please be there for them.
I want to express my sincere apologies to everyone affected. Utopia was built to be a high-impact company and we have attracted extremely talented people who we truly appreciate and respect. That’s why this decision is so hard to make. I know you will have a lot of questions, please know that more information on next steps will be provided by the P&C team shortly.
Take care of yourselves and each other,
Mattias
Music Business Worldwide