BMG has laid off an estimated 40 employees amid changes impacting its international and theatrical departments.
Music Business Worldwide reports CEO Thomas Coesfeld shared the news in a company-distributed memo addressing BMG consolidating its New York and Canada-based recorded music operations into its Los Angeles office. The New York-based theatrical productions will also cease along with any of its future ventures in film.
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“These are tough but necessary decisions,” Coesfeld wrote about the eliminations that target its international marketing department for recordings as well as its Modern Recordings label based in Berlin. In addition, Executive Vice President of Global Repertoire Fred Casimir and Senior VP of Global Repertoire Jason Hradil were also let go along with affected employees in its Berlin, New York, and Los Angeles offices.
“Much like our distribution alliance with Warner Music/ADA struck in 2016, our previous international set-up – established around the same time – was the right decision back then,” said Coesfeld in the memo. “It allowed us to grow and was the ideal structure for the time. Our recordings business is now three times the size it was then and it’s overwhelmingly streaming-based. It is no surprise that the way we manage our business also has to change.”
A representative for BMG did not immediately respond to Variety‘s request for comment.
BMG started to cut down its activity with Warner Music Group’s ADA earlier this summer, instead opting for direct management of its digital distribution front. In the last week, BMG also confirmed an alliance with UMG’s commercial services division to move the distribution of physical formats of BMG’s music – including vinyl and CD. The alliance was described by Coesfeld as a “significant step to further enhance our service to BMG-signed artists,” with more activity between the two entities to come.
“Our talented team have done a great job, driving international campaigns for artists including Lenny Kravitz, Kylie Minogue, and Louis Tomlinson, but unfortunately on a business level, expectations from this novel structure were not met and it created duplication of functions with local teams,” wrote Coesfeld. “I would like to extend my thanks to the team members involved on behalf of everyone at BMG. They have done us proud. They were given the news only today, and I understand it has been a shock. We are in close contact with them and in Germany with our Workers Council to ensure everything is handled in a respectful way.”
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