Entertainment Industry

« Previous | Company Town Home | Next »

Layoffs hit Universal Music Group

Universal Music Group went into 2009 much the same way it did 2008, boasting an industry market share of more than 30%, according to Nielsen SoundScan, making it the largest of the four major labels. Yet the continued dominance of the company hasn't made it immune to the year-after-year sales declines afflicting the music industry, and today the company further streamlined its label and distribution divisions.

UMG cut about 50 staffers today, according to label sources who spoke on the condition of anonymity, less than 1% of the company's worldwide workforce of 8,000. Cuts were made across multiple labels as well as UMG's distribution arm, Universal Music Group Distribution, which is headquartered in Universal City. Labels affected included Verve and Interscope.

An UMG spokesman confirmed the cuts but declined to answer questions or comment on specifics.

The label is "continuing to transform our organization to better serve our artists and business partners," the company said in a statement. "Given the current economic climate, we have to be as agile and efficient as possible. Unfortunately, these ongoing efforts have resulted in some redundancy. However, UMG will now be even better positioned to compete in the growing global, digital marketplace."

Universal had breakout success in 2009 with Lady Gaga, whose "The Fame" was the fourth-best-selling album of the year with more than 2.2 million copies sold, according to SoundScan. The company's distribution arm handles releases for such top-selling labels as Big Machine and Disney. Big Machine's Taylor Swift had the bestselling album of 2009 with "Fearless," a release that sold 3.2 million copies last year alone. 

Overall album sales in 2009 stood at 373.9 million, a nearly 13% sales decline from 2008. Digital sales continue to increase, but not at a rate that's making up for the loss in CD revenue. Digital track sales stood at 1.16 billion in 2009, an 8.3% increase from 2008. 

UMG ended 2009 by investing in a new business model. In early December, the label made a splash with the launch of Vevo, an online video destination that serves as a sort of music video equivalent of Hulu. The site was unveiled at a party in New York, with U2's Bono boasting that the launch marked "the passing of the old model that was the music business." The label partnered with Sony Music Entertainment on the video site, which embeds short ads at the front of music clips. 

-- Todd Martens

Photo: Lady Gaga. Credit: Carolyn Cole / Los Angeles Times

Comments () | Archives (8)

The woman in the photo looks like a drag queen! Is this musical talent or some satire. Frankly - who cares!

Universal Music Group has brought us the unprecedented privilege of our nations (and other nations) children being able to turn on any radio and hear a hamaphrodite (Lady Gaga) sing the words "I want to take a ride on your disco stick". Thanks UMG, what a travesty that some of you are laid off.

Universal purchased, then immediately shut down, the Living Era label because it disagreed with the UK's 50 year copyright law. Universal can disappear completely as far as I am concerned. It is a menace to the music industy.

Maybe if you promoted music that people wanted to actually listen to that may help your slumping sales.
I think there's a real thirst amongst consumers who want to listen to well crafted songs and are performed by actual musicians.
I believe this to be true and is not restricted to any particular genre.
Enough with prefabricated pop stars.
Fire your AOR people.
Start from scratch.

I thought the same thing, jag, that Universal was laying off it's Lady Gaga drag queen show. I had no idea that was her. The hot body doesn't hide the horsey face.

Pasadena Jag asked "The woman in the photo looks like a drag queen! Is this musical talent or some satire. Frankly -who cares!"

Apparently you and Frankly do!!

Universal has made a tough decision. Laying off valuable employees is never a joyous occasion. However, given the present restructuring of the music industry it may be necessary for them. Especially if it will better serve their artists and share holders. After all, we are in this for the love of music AND the money. This is a business and overhead has to be paid along with a healthy profit.

I agree with the post below regarding the market wanting songs performed by actual musicians. However, at the same time I must say that regardless of the musician talent used, a majority of the songs are well crafted.

As for the slumping music sales, it has nothing to do with people not wanting the music and everything to do with illegal piracy and the rise of online streaming. I support online streaming and free legal downloading, but not illegal downloading. There is a way that the artists, labels and consumers can all win in this restructuring process. If we as consumers are patient, we will be pleased in the end, and as for us working diligently on the creative and business side of the industry, we'll be pleased as well.

Benjamin Wade Inman
Managing Partner

to the people at universal who where laid off in the marketing and promo department if u need a job send resume to my email youngstaticmusic@gmail.com
you must have experience in pop, hip hop, and rock in order to be consider,this is a job that pay's,thank you so much, hope to hear from you soon.


Recommended on Facebook

In Case You Missed It...

Photos: L.A.’s busiest filming sites