Universal Music Group is preparing to hand out pink slips to staff at Sanctuary Group's U.K. label arm.
Billboard.biz understands that Joe Cokell, CEO of Sanctuary Records Group Worldwide, and Roger Semon, COO Sanctuary Records Group, are among the executives likely to be ushered out as UMG begins to wield the axe on its new acquisition. Sources say Cokell is starting up his own company.
"In consultation with senior management of the Sanctuary Group, it has been decided that its Sanctuary Records U.K. division will no longer continue as a stand-alone, front-line record label," UMG says in a statement today.
With effect from yesterday, UMG has begun consultations with employees "to minimize redundancies" as a result of the action.
Following integration, Sanctuary CEO Frank Presland will be kept on board, well-placed sources suggest, to shore-up UMG's newly-acquired artist management division.
UMG notes that Sanctuary's catalog unit will continue to operate, working with Universal Music U.K.'s catalog division.
Sanctuary's U.K. recorded music roster includes Dolores O'Riordan, Cooper Temple Clause and Marc Almond.
UMG sources were quick to point out that the latest development is not a prelude to similar actions at Sanctuary's valuable merchandising, agency and artist management divisions.
However, company insiders suggest Sanctuary's U.S. label arm would be next in line for restructuring.
A combined UMG-Sanctuary will pool an enormous wealth of reggae catalog, and give Universal a valuable foothold into the live music business through the independent music firm's artist management and live agency arms. And through the purchase, UMG grabs a hugely profitable merchandising business.
Just last month, Sanctuary Group chairman Robert Ayling and three non-executive directors left the music company's board.
UMG swooped for Sanctuary Group on June 15 in a cash deal valuing the company at about £44.5 million ($87.68 million). The transaction was closed Aug. 2.
The listing of Sanctuary shares was cancelled with effect from Sept. 3.