Warner Reorgs and Slashes
Key elements of the restructuring include the consolidation of several business divisions within the Elektra Entertainment Group and The Atlantic Group labels, including the legal and business affairs, finance, and label sales units. Elektra's chairwoman Sylvia Rhone as well as Atlantic's co-chairman Val Azzoli and co-president Ron Shapiro have all left WMG in the wake of the announcement. The company says that Lyor Cohen, chairman and CEO of US Recorded Music at WMG, will serve as interim chairman of both labels until a final management structure is announced in the near future.
WMG also announced the initial structure of its senior management team. Reporting directly to Edgar Bronfman, Jr., now chairman and CEO of the company, will be Lyor Cohen; Paul-Rene Albertini, formerly president of Warner Music International (WMI), who will now run the company as its chairman and CEO, with responsibility for all of Warner Music's international companies and affiliates in Europe, Latin America, Asia Pacific, and Canada; and Leslie Bider, who will serve as chairman and CEO of Warner/Chappell Music, WMG's international music publishing company. Atlantic Records founder Ahmet Ertegun is to remain with WMG, which says it is also currently continuing discussions with Roger Ames about a senior management role.
The news will primarily affect the company's international workforce. WMG says that approximately 20% of its global staff, or around 1000 employees, will be cut; most of the down-sizing is anticipated to take place within the first month. The company hopes to reap $225 million in reduced costs partly as a result of shrinking its employee base. As of March 1, it employed approximately 4500 people, 30% less than were at WMG in 2001. The company had already sold its manufacturing and distribution operations, which employ 5000 people last year.
Bronfman noted that he wanted to move quickly, adding, "These significant steps to streamline Warner Music Group's operations are essential to the future success of the company. While the restructuring necessitates some painful changes, they are vital to creating a more agile organization that will allow us to remain competitive in the rapidly evolving marketplace and to take full advantage of future opportunities."