Warner Music Group Corp. is planning to lay off about 600 employees, or around 10% of its workforce, as part of a restructuring plan aimed at freeing up more cash to invest in music and boost growth.
said in a filing late Wednesday that it expects the plan to generate a cost savings of about $200 million on an annualized basis by the end of fiscal 2025. The company joins Snapchat’s parent Snap Inc.
and Okta Inc.
in announcing recent workforce reductions.
The majority of the costs savings would go into increasing investment in the company’s “core recorded music and music publishing businesses, new skill sets and tech capabilities,” the company said.
The company is ending or winding down a few non-core operations and media properties, including its in-house ad-sales team, it said. The layoffs would be related to that.
Warner expects to incur about $85 million in severance and other layoff costs, to be paid by the end of fiscal 2026 and with the majority of the charges happening by the end of the year.
All told, the fiscal 2024 impact will be around $120 million in one-off pre-tax charges, or about $90 million after taxes, the company said.
Shares of Warner Music rallied more than 6% in extended trading after the news and after the stock ended the regular trading day down 0.6%. Warner’s stock has lost about 1% in the past 12 months, contrasting with gains of about 20% for the S&P 500 index
in the same period.