The Daily Swarm has a comprehensive overview of major label E.M.I. chairman, Guy Hands’ announcement to implement massive cutbacks.

Despite Hands’ best efforts to put a positive spin on EMI‘s latest restructuring plan, there’s no escaping the grim nature of the news. The company expects to cut up to 2,000 jobs—about a third of its global workforce—during the next six months, with nearly all of the cuts coming in its recorded-music division.

That’s a lot of jobs to lose. Those jobs will include ones that I think a lot of people don’t think of when they hear the words “record industry’, manufacturing, warehouse, accounting, clerical, office staff, art department and so on. But, there will be a direct effect on recording artists as well, of course.

He told staff gathered at a London cinema: “In the past we have followed the industry model of signing up as many artists as possible, while taking huge bets on a few. This is not sustainable. We cannot provide meaningful support for that number and everyone suffers as a result.”

Mr Hands, whose Terra Firma private equity vehicle bought EMI for £3.2bn last year, told music managers yesterday that only 3pc of the company’s acts were profitable on today’s overheads. It is understood that hundreds could leave the roster.

He revealed the group had not made an overall profit from new releases, traditionally seen as the lifeblood of any record label, for seven years. “Some of our new music is profitable, but most is not, even before overheads. Over time as the consumer moves more to digital, unless more are willing to pay, all will become unprofitable.”

So, the mile marker for hard times in the music biz has now disappeared from the rear view mirror and the famine is now in session.

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