Warner Music Group has formed five task forces designed to identify potential overhead reductions within specific departments, sources say. This comes on the heels of a mandate that went into effect i
Warner Music Group has formed five task forces designed to identify potential overhead reductions within specific departments, sources say. This comes on the heels of a mandate that went into effect in December, wherein each WMG division was given overhead-reduction target amounts. WMG is looking to achieve $225 million in cost savings in anticipation of the closure of the company's sale to an Edgar Bronfman Jr.-led investment group, possibly by the end of the month.
The task forces--for publishing, international, video, sales and corporate--were formed under the auspices of the Boston Consulting Group to scrutinize whether there is duplication of effort within divisions and whether the company should be restructured to achieve further savings.
As for the December mandate, most divisions have already responded with plans on how to reach their cost-cutting goals, sources say.
Chairman/CEO Roger Ames on Wednesday sent a memo to the company's 5,300 employees telling them of the efforts to "identify significant restructuring initiatives." The memo--first reported in The Hollywood Reporter--also provides details of severance packages for terminated staffers. The severance--three weeks per year of employment (four weeks per year for those who were with the company less than four years)--will be available for 18 months, leading some WMG executives to speculate that there will be an initial burst of severe cuts, followed by more layoffs over time.
WMG had no comment.