Warner Music Group to Cut Global Workforce by Around 4%

The new Chief Executive Officer of Warner Music Group Corp WMG 1.13% announced plans to lay off approximately 4% of his global workforce, citing the need to reposition the company in the direction of technology as the reason for the layoffs.

WMG employees were notified of the news via a memo sent by Warner Music Group CEO Robert Kyncl, which was obtained by MBW on Wednesday morning (March 29).

‍

Kyncl wrote that "many of our leaders throughout the company have come to the same conclusion during his discussions with many of them - that in order to take advantage of the opportunities that lie ahead of us, we will need to make some tough decisions in order to continue to grow."

‍

Moreover, he noted that in line with this direction, the company has taken the difficult decision to reduce its global workforce by approximately 270 people, which amounts to about 4% of its total workforce.

‍

According to Warner's 2022 annual report, as of September 30, 2022, the company employed approximately 6,200 people worldwide, and this number is expected to grow.

‍

As Kyncl mentions, Warner is “reallocating resources in order to develop a comprehensive set of skills for artist and songwriter development as well as new technology initiatives.”

‍

Moreover, he added that the company would also be reducing discretionary spending in order to provide us with more flexibility with regard to our future.”

‍

"I would like to make it clear that this is not a blanket exercise designed to reduce costs. The decision-making process has been carefully planned by our operators around the world in order to set us up for long-term success by taking into account the specific needs, skills, priorities, and opportunities for each label, division, and territory," Kyncl added.

‍

“WMG is positioning itself for this new phase of growth at the intersection of creativity and technology.” - Robert Kyncl

‍

As Kyncl described in another part of the memo, "the music business is full of new possibilities: more fans engage with artists and songs than ever before, we have a worldwide reach, and new business models are being developed daily."

‍

"It is at this intersection of creativity and technology that WMG is positioning itself for this new era of growth," Kyncl continued.

‍

Kyncl's announcement comes precisely three months after he was appointed as Warner Music Group Corp's new Chief Executive Officer (effective January 1, 2023).

‍

In the first few months of Kyncl's tenure at YouTube, he has already employed several senior hires from the company. The newly-created position of President of Technology was reassigned to Ariel Bardin by Warner in February, according to the company's website.

‍

WMG said that Bardin will be a part of the company's Executive Leadership Team, overseeing the company's technology and data teams and overseeing the development of systems, processes, and products. Bardin is based in New York and will contribute to the company's overall success.

‍

Kyncl made the acquisition of Bardin his second ex-YouTube/Google executive since the latter became WMG's CEO in January 2023.

‍

Kyncl, in January, made a decision to appoint Tim Matusch, formerly the Managing Director of Strategy & Business Operations at YouTube, as WMG's Executive Vice President of Strategy & Operations, a role that Kyncl described as a "new function" at the company.

‍

Kyncl is a former employee of Google/Alphabet himself, having served in various senior capacities at YouTube for more than a decade, including his most recent position as Chief Business Officer, prior to joining WMG.