Local Cuts Possible As Universal Music Swings The Axe

16 January 2024 | 4:30 pm | Ellie Robinson

The global major is reportedly planning to lay off hundreds of employees in the first quarter of 2024.

Universal Music Group

Universal Music Group (Supplied)

Universal Music Group are reportedly planning to fire hundreds of employees worldwide across the first quarter of 2024 – and Australia’s team may not be safe from the incoming exodus.

The news came in a report from Bloomberg, where it was said Universal’s recorded music division “will be hit the hardest”. It comes after the company’s EVP and CFO, Boyd Muir (who earns a reported annual salary of seven figures), confirmed last October that Universal would be “cutting to grow” in 2024. He said at the time, “[We] are currently conducting a careful review of our cost base, which we will complete over the coming months.”

In a statement provided to The Music, a spokesperson for Universal did not rule out the cuts having an impact on their Australian division. “We continue to position UMG to accelerate its leadership in music’s most promising growth areas and drive its transformation to capitalise on them,” they said.

“Over the past several years, we have been investing in future growth – building our ecommerce and D2C operations, expanding geographically, and leveraging new technologies. While we maintain our industry-leading investments in A&R and artist development, we are creating efficiencies in other areas of the business so we can remain nimble and responsive to the dynamic market, while realising the benefits of our scale.”

The news comes as a detour from Universal’s established mode of operation – the company’s headcount had grown steadily each year since 2016, from a staff of 7,547 to a staff of 9,992 at the end of 2022. Europe held the bulk of Universal’s global workforce, with 42 percent of staff, followed by North America with 39 percent.

It’s especially odd that the company would prioritise efficiency over strength in labour – or creating jobs in an already-struggling industry – given Universal recorded its revenue at €2.752 billion in Q3 2023 alone, reflecting a year-on-year rise of 3.3 percent (reportedly owed to the company’s focus on streaming and physical media).

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Following last week’s Bloomberg report, UMG’s stock value rose by more than 6.5 percent (it sits at €26.92 per share at the time of writing), marking a 15 percent rise from January 2023.

Speaking in Universal’s Q3 2023 earnings call, Muir added of the company’s ambitions: “We remain focused and optimistic as we continue to execute on the growth prospects that lie ahead for UMG We see enormous opportunity for value creation, both for our artists and for the company, as we advance our artist-centric initiatives and work to further capture the value of the engagement being driven by our unparalleled roster of artists and songwriters.”