On… Warner’s cutbacks, and the larger story.
MBW Reacts is a collection of analytical commentaries from Music Enterprise Worldwide written in response to main current leisure occasions or information tales. Solely MBW+ subscribers have limitless entry to those articles. The under article initially appeared in Tim Ingham’s newest ‘Tim’s Take’ e mail, issued solely to MBW+ subscribers.
It’s no secret that Warner Music Group – like Common Music Group and others within the enterprise – has considerably lower prices up to now couple of years.
What’s much less appreciated by many within the business is how lengthy this course of has been happening at WMG, how massive it’s, and the way seen its impression is changing into.
Instance: WMG now has no devoted recorded music head in both the UK or Germany – the world’s third and fourth largest recorded music territories, per IFPI knowledge.
(UK boss Tony Harlow exited final 12 months, as did the duo who oversaw Warner’s German/Central Europe outfit: Doreen Schimk and Fabian Drebe. Warner Music’s mixed Central Europe and Benelux enterprise unit is now run by Netherlands-based Niels Walboomers.)
Warner Music additionally has no in situ recorded music boss in one other Prime 10 territory, Canada: New York-based Eric Wong leads its Canadian operation from the US (alongside his two extra roles!). Former WM Canada boss, Kristen Burke, exited in October.
These are only a handful of serious adjustments which have sprung from a three-part restructuring program launched after Robert Kyncl turned WMG CEO in January 2023:
- In March 2023, Kyncl introduced WMG was shedding 270 folks, a transfer which slashed $50M from the agency’s annual pre-tax prices;
- In September 2024, Warner confirmed it was reducing an extra 750 workers, the bulk from its ‘owned and operated media’ subsidiaries, leading to extra annual price financial savings of $260M;
- And in July 2025, Kyncl introduced an extra $300M of annual cost-savings, of which $170M could be achieved through layoffs. (Coincidentally, $170M can be the quantity WMG expects to pay out in severance because of these adjustments.)
WMG didn’t reveal a selected variety of roles that might be eradicated in its 2025 spherical – probably as a result of it might have been massive sufficient to gobsmack.
Primarily based on what we all know from 2023 and 2024’s WMG cutbacks (and their common per-employee severance), I’d estimate 2025’s spherical will outcome within the lack of round 1,000 extra roles.
To recap: ~1,000 roles lower in 2023-24, and an extra ~1,000 focused within the 2025 plan.
These cuts have concentrated in WMG’s label enterprise: by way of this system up to now, 91% of redundancy expense has landed in Warner’s Recorded Music division, with 2% in publishing, and 7% in Company.
WMG’s most up-to-date annual report confirms that the 2023 and 2024 restructuring plans are actually each “considerably full” – i.e. the ~1,000 roles earmarked for redundancy in phases one and two have already been extinguished.
As for the extra estimated ~1,000 job cuts mapped out in 2025?
Over half the related severance – $90M of $170M – was paid earlier than the tip of September 2025, suggesting Warner is basically carried out.
The impression of the restructuring is beginning to present up in WMG’s public numbers.
On the shut of its FY 2025 (September), Warner counted 5,500 workers world wide, in response to its annual SEC report.
That was down by 700 folks versus the equal determine in 2022.
Factoring in new hires, I count on Warner’s three-pronged restructuring program will in the end scale back whole workers quantity by about 25% – from 6,200 workers earlier than Kyncl’s arrival in 2023, nearer to 4,700 by the tip of this 12 months.
Not all of that headcount discount shall be achieved by way of layoffs; some will come from asset disposals.
As I’ve written earlier than, Warner’s current sale of Songkick to Suno jettisoned 25 workers. Different workers exited when WMG offloaded its non-core media belongings together with UPROXX in 2024.
An extra asset sale seems imminent: current WMG filings verify that merch platform EMP is being “held on the market” by the most important.
(MBW first informed you in August that Warner was seeking to promote EMP, full with a $70 million write-down within the asset’s worth.)
Why the cuts – and the place’s the cash going?
All through WMG’s three-year cutbacks program, Robert Kyncl has insisted that – along with being accretive to margin – Warner would look to reinvest a portion of the financial savings into A&R.
The numbers present Kyncl is coming good on this promise.
In FY 2025, in response to its SEC filings, Warner Music Group spent USD $2.34 billion on ‘A&R’ throughout data and publishing (this determine consists of royalties and advances paid to expertise, plus studio prices).
That A&R determine was up 8%, or by $175 million, versus the prior 12 months.
It was additionally up by $382 million vs. the equal determine within the 12 months earlier than Kyncl joined WMG (FY 2022).
Most significantly to Warner’s shareholders, WMG’s restructuring program has additionally helped drive up the agency’s margins.
In FY 2022, WMG’s Adjusted OIBDA (Working Revenue Earlier than Depreciation and Amortization) represented 19% of its annual revenues. By FY 2025, that determine had climbed to 22%.
An OIBDA margin within the mid-twenties shall be subsequent on buyers’ want checklist.
The larger image – and a platform for development
After all, Warner isn’t alone in making cutbacks to its workforce. A number of business gamers are sharpening their give attention to profitability – whereas taking higher benefit of technological efficiencies, and recalibrating useful resource in the direction of high-growth markets.
Common Music Group, as talked about, has its personal ‘realignment’ program underway, designed to supply EUR €250M (round USD $290M) in annual price financial savings. UMG’s Boyd Muir confirmed final summer time that UMG anticipated to be round two-thirds of the way in which by way of this two-phase plan by the tip of calendar 2025.
Elsewhere, BMG boss Thomas Coesfeld has been open about restructuring headcount up to now few years – whereas considerably bettering profitability.
Effectivity-seeking strikes may also be seen at corporations like Consider, which simply this week eradicated the CEO position at key subsidiary TuneCore. (Following the departure of long-time TuneCore boss, Andreea Gleeson, the DIY platform will now be CEO-less – overseen by Consider’s world head of music, Romain Vivien.)
Warner, although, is arguably making essentially the most seen reductions, and the most materials cuts when it comes to proportion of whole workforce affected.
Removed from being a barrier to development, this speedy restructuring below Robert Kyncl may but show to be a launchpad for growth.
Warner can now look to drive topline income development by way of inorganic means – with out risking the dilution of its margin to ranges that may hassle public buyers.
A part of this inorganic income drive will, little question, come from catalog acquisitions through WMG’s $1.2 billion JV with Bain Capital.
However, as I’ve beforehand identified, Warner additionally has a critical situation on its palms in relation to servicing independents – with ADA struggling to compete with the size of The Orchard (and AWAL) at Sony, and Virgin Music Group at UMG.
Robert Kyncl has beforehand expressed a desire to “construct” fairly than “purchase” WMG’s impartial distribution operation. And in a service-based (fairly than rights-ownership-based) discipline, there are arguments for why this is sensible.
However with WMG‘s turnover now roughly half the dimensions of UMG’s – and UMG set to swallow Downtown/FUGA within the weeks forward – is now the time for Kyncl’s workforce to make an acquisitive transfer within the increasing indie area?
Apparent targets for such a swoop would come with ONErpm, UnitedMasters, Symphonic, and the fast-growing TooLost.
However I heard a whisper over the festive break that Bruno Guez’s Revelator was attracting heavy acquisitive curiosity. It could possibly be a very good match for Warner.
Revelator would include a revered tech stack that WMG may ingest and develop.
It additionally focuses on FUGA-esque white label companies for indie labels – a possible turn-key answer for a serious music firm seeking to rival FUGA when/if it falls below Virgin Music Group’s umbrella.
In the meantime, Warner shall be hyper-aware of its standing within the world business pecking order proper now.
As I reported in November, WMG is nudging nearer to the day when its revenues are, in actual phrases, nearer to these of HYBE than they’re to Sony’s music rights enterprise.
This 12 months, HYBE will handle one of the hotly-anticipated (and hotly-monetized) stay exhibits of all time: the return of BTS after 4 years away, through a 79-date world tour.
In 2019, Michael Rapino, CEO of Stay Nation, mentioned {that a} billion folks (!) had visited his firm’s platforms to try to seize tickets to BTS’s then-concert run.
I’m not absolutely satisfied an eighth of the world’s inhabitants had been crazed about J-Hope and co (there would have been loads of bots – and loads of Ok-pop megafans keen to make use of them).
But it surely actually units the scene for what shall be one of many worldwide business’s largest blockbuster money-makers in 2026.
With a supposed ‘impartial’ in HYBE pulling the strings, count on loads extra dialogue in regards to the definition of ‘main’ music corporations and ‘non-major’ music corporations within the months forward – and the place each Warner and HYBE match on the spectrum.
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