Warner Music Group To Reduce $170 Million In Annual Costs Through ‘Headcount Rightsizing’

Warner Music Group is set to reduce its annual costs by $300 million, with a significant chunk—$170 million—going towards “headcount rightsizing.”

The music giant will save a further $30 million by reducing costs in administrative and real estate expenses, which are tied to the reduction of personnel. The remaining costs the label will target are SG&A expenses. Warner expects its plan to be “fully implemented by the end of calendar year 2026.” It is expected these retrenchments will be felt in all territories including locally.

Warner’s cost-cutting plan, under the leadership of CEO Robert Kyncl, began last year, backed by the statement that the company would “free up more funds to invest in music.”

Last February, the label announced it would reduce its global workforce by approximately 10%, resulting in the redundancy of 600 jobs. Later in the year, it was announced that 750 roles would be on the chopping block. Most of those jobs were in the company’s Owned and Operated Media division.

As the news of Warner cutting $300 million in costs arrived on the same day (1 July) that the company launched a $1.2 billion joint venture fund with Bain Capital to purchase music copyrights.

In a staff statement provided to The Music, more details surrounding the latest restructuring were revealed.

Beginning the statement with a note of how Warner has embarked on a two-year transformation to build a “fast, innovative, and collaborative organization,” the label added that its artists have held “half of the Top Ten on the Spotify Global chart for the past ten weeks,” as well as the #1 spot for “all but four weeks of 2025.”

After acknowledging the hit machine it’s developed, the staff statement continued by announcing the “remaining steps” in Warner’s plan to “future-proof the company and unlock the next era of growth.”

“Specifically, we’ll be reducing our annual costs by ~$300 million as we reinvest in the business: ~$170 million through headcount rightsizing for agility and impact, and ~$130 million in administrative and real estate expenses,” the statement reads. “Many changes will be implemented in the next three months, with the remainder in fiscal 2026.”

Despite the cost-cutting, Warner is set to “put more money behind the music” in its new growth plan, which includes a sharpened approach in A&R and an “ambitious” M&A pipeline, particularly for its classic catalogues.

The statement adds that Warner is “becoming a stronger, leaner company” with the aim of “greater cut-through.” The label will host “faster, more agile” teams of local experts, who enhanced groups in Marketing, Distribution, Catalogue, and Merchandising & Direct-to-Fan, will support.

The company will also continue to prioritise “better digital tools for artists, songwriters, and employees,” including the expansion of its WMG Pulse app rollout.

“In an ever-changing industry, we must continue to supercharge our capabilities in long-term artist, songwriter, and catalog development,” the statement continues. “That’s why this company was created in the first place, it’s what we’ve always been best at, and it’s how we’ll differentiate ourselves in the future.”

Warner Music Group globally reported revenue increases of 6.44% in 2024, reaching $6.42 billion. This comes after increases of 1.99% in 2023 and 11.66% in 2021. Locally, Warner Music Australia reported revenue of $56 million in 2024 and had 67 employees according to an IBISWorld Report.

In an interview with The Music Network last month, Warner Music Australia's Dan Rosen celebrated the success of the local branch with Warner taking each of the week’s top five singles and seven of the top ten.

"It’s a really phenomenal effort and historic levels of chart share,” he said. “These things are built up on years of hard work from team ship and teams around the world, in terms of artist development, A&R, and connecting with culture.

"We’ve got the most passionate and hardworking team across both records and publishing in the market, and I feel very proud to lead them."

Things have been harder for local catalogues, with Rüfüs Du Sol's On My Knees being the last original Australian song to reach the ARIA end-of-year charts in 2022, sneaking in at #92. Despite local market challenges, Rosen pointed to international successes with Kiwi band Balu Brigada and Australian singer-songwriter Oliver Cronin, along with Cyril's hits, including covers of Stumblin’ In and There She Goes.