The record label has confirmed that it will begin layoffs this year in order to cut costs

The Universal Music Group (UMG) has revealed that it will lay off a significant number of employees in the coming weeks, with the most in the recorded-music sector — the company’s biggest division.

As the world’s largest record company, UMG had around 10,000 employees at the end of 2022, Variety reported. 

Though paid streaming services have expanded since its launch in the mid-2010s and increased during the COVID-19 pandemic, the music industry is now seeing a leveling-off in growth.

According to Bloomberg, UMG’s earnings climbed just three percent in the third quarter of 2023 — a fraction of their profits the year prior — and was predicted to advance at the same rate in the fourth quarter.

UMG is the most recent record company to implement layoffs — in March 2023, Warner Music reduced its staff by around 4%; Warner’s new CEO Robert Kyncl also announced plans for a broad change in the company’s focus over the next decade. 

“We will cut overhead in order to grow it elsewhere,” stated UMG’s chairman Lucian Grainge, according to Variety. “We do have experience in managing the business, in managing the teams, and the businesses within that make up the group, and we’ve got a plan.”

“We continue to position UMG to accelerate its leadership in music’s most promising growth areas and drive its transformation to capitalize on them,” added a UMG representative. “Over the past several years, we have been investing in future growth—building our ecommerce and D2C operations, expanding geographically, and leveraging new technologies. 

“While we maintain our industry-leading investments in A&R and artist development, we are creating efficiencies in other areas of the business so we can remain nimble and responsive to the dynamic market, while realizing the benefits of our scale.”