Warner Music Group to Cut 4% of Workforce

Mr. Kyncl said the company is reallocating resources toward new skills for artist and songwriter development. His appointment was broadly seen as a bet on tech development as the music industry increasingly looks to social media, gaming, the metaverse and artificial intelligence for licensing opportunities and future revenue growth beyond streaming. 

“I want to be clear that this is not a blanket cost-cutting exercise,” Mr. Kyncl said in the memo to the company’s staff. He said the company is reducing discretionary spending and open positions.

Warner Music, the third-largest major music company, is home to superstars including

Ed Sheeran

and

Madonna.

Shares in the company, which went public in 2020, rose less than 1% in trading Wednesday. 

In February, the company reported lower earnings for its first quarter amid weakness in the recorded-music division. In a letter to investors at the time, Mr. Kyncl pointed to a challenging business environment but said the company expected to have a strong release schedule in the second half of the year while managing costs. 

Warner Music owns labels including Atlantic, Elektra and its flagship Warner Records, as well as Warner Chappell Music, the third-largest music publisher by revenue. The company’s roster includes Lizzo,

Dua Lipa,

Coldplay and Prince. It also owns the catalogs of

David Guetta

and

David Bowie.

Also Wednesday, Warner Music announced changes in its U.K. operations, including

Isabel Garvey,

known for her work at Abbey Road Studios, taking on a newly created chief operating officer role. At the company’s Parlophone Records label in the U.K., the co-presidents and general manager will depart, the company said.

In January, Spotify Technology SA said it would lay off about 600 employees, or roughly 6% of its workforce, as part of broader cost-cutting measures after the streaming company went on a spending spree during the pandemic. The streaming giant also shook up its top ranks, with a top architect of its podcast strategy departing and the company reorganizing under two longtime executives. 

Write to Anne Steele at [email protected]

Corrections & Amplifications
Isabel Garvey will be chief operating officer of Warner Music’s U.K. operations. An earlier version of this article incorrectly said she would be COO of the company’s Parlophone Records. (Corrected on March 29)