Weak sales in the holiday season has forced EMI Group to issue a profit warning Friday, outlining another restructuring to cut costs and also announced that their two top recorded music executives are gone.
The company said that for the fiscal year, which will end on March 31, there will probably be a loss of 6%-10% in revenue. It's somewhat of a bitter announcement as the company predicted a strong second half for the year with releases from some of its big artists. It didn't happen.
Alain Levy who was chairman and CEO of the recorded music division of EMI Music and David Munns, vice chariman of EMI music are the two executives who have l
eft. Replacing Levy as CEO of EMI Music will be Eric Nicoli.
The company continues it years of restructuring with another phase of cost reductions as they are looking to trim $213 million from its budget, which will include cutting jobs.
"Specific fixed cost saving initiatives will include the reduction of front and back office overhead and an increase in shared services in both divisions and across all regions," the company said. "In addition, there will be a significant reduction in central overheads at EMI Music and EMI Group."
The company attempted a similar strategy that partially worked for the movie industry this year by putting out some of the heaviest hitters they could to fight the slowing of the industry. For Hollywood it resulted in a good, although not great year, but with EMI, they tried the same strategy and it didn't come through for them. This leaves them will no alternative but to do what they're doing.
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