By Michael Elkins
Warner Music Group (NASDAQ:WMG), the label behind artists such Ed Sheeran, Lizzo Cardi B and Bruno Mars, announced Wednesday that the media company will lay off 4% of its workforce, or 270 employees, globally and cut down discretionary spending in the near future.
Robert Kyncl, WMG’s newly appointed CEO, told staff via an internal memo that “we’re reallocating resources towards new skills for artist and songwriter development and new tech initiatives.” About 6,200 employees worked at Warner Music as of last September, per its annual report.
Kyncl, who replaced Stephen Cooper as head of the music label on Jan. 1, is focusing on technology after his experience at the Google (NASDAQ:GOOGL) social media platform in building business relationships with online creators and ensuring the video and music platform was a top platform for creator monetization.
“In my discussions with our leaders across the company, many of them came to the same conclusion – that to take advantage of the opportunities ahead of us, we need to make some hard choices in order to evolve,” Kyncl added in the memo. The new Warner Music head also insisted the job cuts were no “blanket cost-cutting exercise” meant to feed through to the company’s bottom line, but part of a stepped-up push into new technologies to drive growth.
Warner Music enjoyed a boom in revenue during the pandemic-induced lockdowns. However, the music industry faces risks from surging inflation that has put a strain on consumers' wallets as shares of WMG have fallen more than 7% this year.
Shares of WMG are up 0.85% in mid-day trading on Wednesday.