Sony Layoffs

Sony Music to Cut 1,000 Jobs as Part of Restructuring
Thursday March 27, 10:37 pm ET


Sony Music Entertainment said it will begin laying off about 1,000 employees, or approximately 10% of its world-wide work force, as part of a vast restructuring of the music company under the new chairman and chief executive, Andrew Lack, Friday's Wall Street Journal reported.
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The cuts will save the company more than $100 million annually, people with knowledge of the matter say. Mr. Lack, a veteran news executive and former president of NBC, was named to the top job at Sony Corp.'s music division in January. He said the layoffs are an effort to "streamline" the company's bloated backroom functions -- including sales, manufacturing and distribution - - and allow the company to focus on bolstering its artist-development efforts.

Mr. Lack, who has no prior experience in the music business, succeeded Thomas D. Mottola, a long-time record executive credited with shepherding a string of Sony hit makers such as Jennifer Lopez and Mariah Carey (News) to stardom. The move surprised many in the music industry, which has seen its sales fall dramatically in the past two years amid widespread music piracy and a poor hit-making batting average. In the fiscal year 2002, Sony Music reported revenue of about $4.4 billion, down from previous years, and had operating losses of more than $140 million last year. The company ranks third in coveted U.S. music-market share, according to Nielsen SoundScan, with 15% of the total music market.

About two-thirds of the total jobs cut at Sony Music will be outside of the U.S. and a third will be jobs in the company's manufacturing division, Mr. Lack said. Furthermore, certain departments within Sony's two major music labels, Epic Records and Columbia Records, will be merged. For example, a single team will now provide administrative functions for the two labels' urban-music divisions. People familiar with the matter said that Mr. Lack also will appoint a single executive to oversee the two labels' sales departments and that music- video production also will be centralized.

Wall Street Journal Staff Reporter Jennifer Ordonez contributed to this report.


I'd like to see more record companys having to lay off their workforce. Maybe they'd finally get the message that CD's are overpriced. But knowing they way they think, the industry will just raise prices.

That is the stupidest f***ing thing I have ever read!

Are you that naive to believe that this changed one thing for the fatcat whitebread executives?

So how does laying off the manufacturing division correlate to "them getting the message that CD's are overpriced"?

I have a very good friend who no longer has a job. (He worked in the Fab plant constructing micro-chips BTW).

These executives won't alter the price of CD's. That would require a sacrifice in their income. In lieu, they cut cost by firing 1000's of people who have nothing to do with CD prices.

There is no juxtapostion between the two.

I have to ask the same thing I did years ago when Sony laid off a huge bunch of people before:

Why are thousands of people working for ANY music company in the FIRST PLACE?!?

Maybe I just have no understanding of the corporate culture or whatever, but I just can't see past this huge bloat. I'll bet it ties into the reasons why the music industry as a whole is on life-support right now.

Whoa Whoa! No confrontations. As they say in the movies "I'm a man of peace".

The music industry has been operating under the same coporate model from the 1950's. Which is essentially a model of excess. Up until fairely recently the industry has always controlled the technology to create music on a medium such as CD's and vinyl. Now that technology has entered peoples homes, why should we have to pay inflated prices?

I don't want to sound Darwinian but there's an old saying; Change or die. The music industry is going to have to change in the future if it wants to endure the age of technology.

We shouldn't....but the Sony, BMG, WEA, EMI, UNI, entities will never sacrifice the mark-up. (It's easier to cut jobs in a "recession")

You're closer than you think there....Natural Selection would dictate that "they" procreate or not leave their genetic make-up in the gene pool. They better change or their way of running things will become extinct.