EMI is to announce tomorrow that 2,000 jobs are to go as part of a major restructuring plan.
Jobs will go throughout the company, in sales, marketing, distribution and artist management, savaging the group’s workforce of 5,500 staff.
Marketing spend is due to be slashed from 20 per cent of projected sales to under 12 per cent.
The slash-and-burn plans originate from EMI’s private equity owner Guy Hands, who bought it for £3.2bn last year and now wants to realise some profits through a major ‘reorganisation’.
There have been a number of warnings that some of the EMI star recording artists have been alienated by the restructuring plans and doubt whether their major recordings will get the marketing boost that is essential if they are to be successful.
Last week, EMI’s UK chief executive Tim Clark left the company, accusing Hands of acting like a ‘plantation owner’ who had stumbled into the music industry via a ‘vanity purchase’.
He reported that a big EMI star, Robbie Williams, will now not deliver a new album because of a lack of confidence about whether the label would be able to handle it.
Meanwhile, the British economy as a whole is fearful about what 2008 will bring, after the pound fell to an all-time low against the euro on Friday and after weak manufacturing data underscored the gloomy outlook for the UK economy.
Sterling dropped to its weakest since the single currency was introduced in 1999, at 75.86 pence to the euro, before later strengthening to 75.63p.
The pound also hit a ten-month low against the dollar at $1.9485 in earlier trade.
Office for National Statistics data showed an unexpected decline in the UK’s manufacturing output in November, with a fall of 0.1 per cent between October and November.
Economists had forecast a 0.1 per cent rise in manufacturing output after October’s 0.3 per cent gain.
‘The pound’s position looks increasingly precarious,’ the Bank of New York Mellon said in a note to investors.
Across the Atlantic, share prices on Wall Street slumped on Friday, with the Dow Jones Industrial Average ending nearly 250 points down amid fears that the US was entering a recession, as consumer spending also fell.
The benchmark index fell 246.79 points, or 1.91 per cent, to close at 12,606.30 while the technology-laden Nasdaq declined 1.95 per cent.
A warning by American Express on Thursday, that spending was slowing and defaults would rise, fuelled the jitters.
And a report in the ‘New York Times’ on Friday said leading investment bank Merrill Lynch had lost $15bn in the sub-prime crisis.
Also on Friday the latest figures showed that the US trade deficit grew to its highest level in 14 months in November, as imports, especially of oil, overshadowed a rise in exports.
The US Commerce Department said that despite a 0.4 per cent rise in exports to a new record of $142.3bn, the trade deficit expanded by 9.3 per cent to $63.1bn (£32bn), driven by a 16.3 per cent jump in the cost of oil imports.
