Beleaguered music direct marketer BMG, based in London, is working on plans to lay off hundreds of employees in a drive to slash costs, according to news reports.
Facing one of the worst financial years in its history, BMG is holding an executive meeting next week to discuss its future but company spokespeople said final decisions on layoffs will not be made right away.
Bertelsmann has earmarked BMG as a division in urgent need of streamlining as the music arm grapples with margins well below its peers — Universal, Warner, Sony and its one-time merger partner EMI.
This development comes one day after BMG Europe promoted Thomas Stein, its head of marketing and A&R to president, replacing Richard Griffiths, who is leaving after just six months in the job.
Earlier this year, BMG Direct laid off 65 employees, or 4% of its staff in its New York and Indianapolis offices (DIRECT Newsline, March 28, 2001).
On top of that, BMG lost two key managers last year — Michael Dornemann and Strauss Zelnick — in the wake of Bertelsmann’s surprise deal with online music swapping service Napster.
BMG executives did not return phone calls at deadline.
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