Warner Music Group announced that they were going to commence layoffs within the next few weeks amid a pivot away from digital media.
On Wednesday (February 7), Warner Music CEO Robert Kyncl sent out a memo to the staff informing them that the company was going to lay off 10% of its staff, or 600 people in the weeks ahead. The announcement comes a day before the release of the company’s earnings report on Thursday (February 8). The digital media division will be the hardest hit, with Uproxx, HipHopDX, IMGN, and Interval Presents as Warner Music seeks to “double down on core business.”
“These are dynamic platforms, but they operate outside our core responsibilities to our roster,” Kyncl said in the memo. It is believed that HipHopDX and Uproxx will be sold off to potential buyers, while the podcast brand Interval Presents and social media publisher IMGN will be wound down. “This is a pivotal moment in the evolution of this great company,” Kyncl continued. “We’ve already begun to inform many of the impacted employees, and the vast majority will be notified by the end of September 2024.” He wrote that in knowing that the news is “unsettling,” that “Warner Music would be “moving as thoughtfully and respectfully as possible, so you have the critical information you need, and we’ll support you through this transition.”
The memo also contained numbers from the earnings report showing that Warner Music feels they’re making the decisions from a stronger position. “So, as part of that plan, we’ll be realizing approximately $200 million in annualized cost savings by the end of September 2025. The majority of these savings will be reinvested, putting more money behind the music,” Knycl wrote, pointing to an 11% revenue growth for the final quarter of 2023. The other preliminary data released showed a rise in net income of $193 million versus $124 million in the quarter at that time last year.
The news of the layoffs does come at an uncertain time for the music and media industry which has suffered some similar stunning cuts. Earlier this month, Condé Nast announced that Pitchfork would be folded into GQ Magazine, and Sports Illustrated announced recently that they had laid off most of its staff. The Sports Illustrated Union and the NewsGuild of New York are currently suing the sports periodical’s parent company, The Arena Group.
Source: The Urban Daily