WEA is cutting 70 staffers serving the traditional brick-and-mortar marketplace, as part of Warner Music Group's ongoing transition to become more digitally focused. Some of those cuts will eventually be replaced by new hires working in the digital marketplace or with responsibilities in both digital and physical product.

"The retail landscape has changed dramatically and we have spent a great deal of time trying to understand the right size this organization needs to be to serve both a physical and digital account base," says WEA president John Esposito.

WEA began its restructuring by "cleaning the slate and starting all over to see what is needed to superserve the market" Esposito says. While the changes now reflect the account base consolidation, it also "gives us the opportunity to hire more staff where we see growth opportunities, which can include physical as well."

While the restructuring still allows WEA to call on the top 20 accounts, the company will no longer have sales representatives physically visiting some smaller independent stores and chains. WEA will now call on those accounts through telemarketing, a strategy they are also focused on improving.

In the past, WEA had one person in each of its four branch offices making phone calls. But that telemarketing function is being consolidated into the company's customer services representatives, which are housed in Aurora Ill. "As opposed to one visit from a sales rep every two or three weeks, we will provide better service through daily phone calls, if the accounts will allow it," Esposito says.

Earlier today, Warner Music Group reported a fiscal second-quarter net loss of $27 million, or 19 cents a share, compared with a loss of $7 million, or 5 cents a share, a year earlier.

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