BMG internally announced a restructure last week which will result in some job cuts, with Billboard estimating that around 40 employees will be impacted by the downsizing.
In a memo to staff, Thomas Coesfeld - who took over as the music firm's CEO in July - said “these are tough but necessary decisions", adding: “I would like to extend my thanks to the team members involved on behalf of everyone at BMG. They have done us proud".
The lay-offs affect the firm's international marketing department and those involved in theatre and film projects, plus the Modern Recordings label that was launched back in 2019. Senior execs set to depart include Fred Casimir, EVP of Global Repertoire, and Jason Hradil, SVP Of Global Repertoire.
Commenting on the decision to discontinue the company's international marketing department, Coesfeld said that, when it was set up five years ago, running marketing in that way was the "ideal structure for the time". However, "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".
He drew a parallel with BMG's recent decision to end its long-running partnership with Warner Music's ADA division on distribution, instead entering into direct licensing deals with the streaming services. Basically, the ADA alliance also worked for a time, but the business has grown and evolved, and a new approach is now required.
The memo then continued: “While the logic of this move is clear, however, we should not underestimate the impact on our colleagues. Our best wishes are with them and BMG will do what we can as a company to help them at this time".
Coesfeld also provided an update on the shift away from using ADA's services, confirming that the company is "on target" to start distributing tracks directly to services like Spotify from later this week.