EMI Records is looking to cut their work force of 5,500 by 2,000 employees, or 36%. The company plans to make the announcement at their upcoming state-of-the-company speech.
This will be accomplished mainly by combining the back-office operations of their 40 separate labels. In an effort to also raise their profits, the company will be attempting to reduce the average spending on marketing an album by 40%. Typically 20% of an albums cost is spent on marketing. The hope is to get that down to 12%.
EMI had a rough 2007 with the very public display by the band Radiohead taking their latest album, In Rainbows, out of the company's hands, and selling it directly to consumers via the web. There has also been talk of British pop star, Robbie Williams, taking his next album away from the company if he can not get assurances of marketing support.
The record label is in a tough spot as they have seen CD sales drop by 20%, so they need to cut their expenses as much as possible, but if they cut too much, their artists could leave from lack of support.