Business

Labels’ latest sad song: Big job cuts

The big music labels may be experiencing the first uptick in sales since 2004, but they’re still singing an old tune when it comes to layoffs.

Universal Music Group is laying off 20 staffers at its Island Def Jam label, while Sony Music will let the pink slips fly in the coming days as it folds its Jive record label, according to sources.

Both Universal and Sony Music, the No. 1 and No. 2 music companies, respectively, are expected to cut more jobs as they reshuffle their ranks following management changes at the top.

Sony employees are waiting to hear who L.A. Reid — who left Island Def Jam for Sony’s Epic label in July — will draft for his senior team.

There are also questions as to whether relatively new Sony Music boss Doug Morris will keep the troika of chairmen at Columbia Records together: Rob Stringer, Steve Barnett and Rick Rubin.

“Jive and Epic have been rudderless for some time,” said one insider.

Behind the widespread restructuring is an effort to cut costs, move employees off the books and contract with outside A&R executives. Yesterday, Universal announced it had hired Brandon Creed, Bruno Mars’ manager, to work with both Island Def Jam and Universal Republic.

Universal’s owner, Vivendi, is set to release second-quarter earnings on Aug. 31 and is expected to detail further cost-cutting moves. According to Vivendi’s 2010 annual report, Universal has reduced headcount to 6,967, down 753 over a two-year period.

By comparison, Warner Music Group, the No. 3 music company, employs half that number, with roughly 3,700 employees. Warner has already said it will shed employees again if its bid for EMI is successful.

The company spent $10 million on severance charges in its latest quarter, $5 million alone from the corporate entity. “We’re at a constant farewell party,” said one insider.

While the labels continue to slash costs, overall music sales for the first half rose 8.5 percent to 821 million units compared to the year-earlier period, according to Nielsen SoundScan. That figure includes albums, singles music videos and digital tracks.