We learned yesterday (March 29) that Warner Music Group is reducing its global workforce by around 270 roles.
The company says in a new SEC filing that it expects the move “to generate pre-tax cost savings of approximately $22 million in fiscal year 2023” and then, “$50 million on an annualized run-rate basis in fiscal year 2024”.
The SEC filing also notes, however, that Warner plans to reinvest that money, stating that it “anticipates investing a portion of the cost savings from the headcount reductions in an amount to be determined for targeted hires, to add new skill sets and for other initiatives intended to position the Company for long-term growth”.
Yesterday, Warner Music Group CEO, Robert Kyncl, gave a strong indication of the direction that reinvestment will take.
In a memo confirming the lay-offs, Kyncl said Warner intended to “reallocat[e] resources towards new skills for artist and songwriter development and new tech initiatives”.
He added that the company is “also reducing discretionary spending and open positions to provide us with additional flexibility for our future”.
News of the layoffs was announced to WMG staff in a memo from Warner Music Group CEO Robert Kyncl, obtained by MBW, in which he wrote that the company has “made the tough decision” to reduce its global workforce by approximately 270 people, or about 4%.
Kyncl explained further that, in his “discussions with our leaders across the company, many of them came to the same conclusion – that to take advantage of the opportunities ahead of us, we need to make some hard choices in order to evolve”.
WMG said that New York-based Bardin will serve as “a key member” of the company’s Executive Leadership Team, overseeing technology and data teams as well as the development of systems, processes, and products.
Kyncl, in January, appointed Tim Matusch – formerly Managing Director, Strategy & Business Operations at YouTube – as WMG’s EVP of Strategy & Operations, which is described by Kyncl as a “new function” at the music company.
Kyncl is ex-Google/Alphabet himself, having spent over a decade in senior positions at YouTube, most recently as Chief Business Officer, before joining WMG.
Added Kyncl in the memo sent to staff on Wednesday: “I want to be clear that this is not a blanket cost-cutting exercise. Every decision has been made thoughtfully by our operators around the world, who considered the specific needs, skills, and priorities of each label, division, and territory, in order to set us up for long-term success.”Music Business Worldwide