Warner Music to lay off 10% of workforce as part of restructuring plan
By Claudia Assis
Warner Music's stock jumps 6% after hours
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.
Warner (WMG) 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. (SNAP), Wayfair Inc. (W), and Okta Inc. (OKTA) 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 SPX in the same period.
Don't miss: Spotify's stock rallies after earnings as user growth brings a positive surprise
-Claudia Assis
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
02-07-24 1826ET
Copyright (c) 2024 Dow Jones & Company, Inc.-
For Bond Investors, Delayed Rate Cuts Demand a Different Playbook
-
What’s Happening In the Markets This Week
-
How the Tokyo Stock Exchange Is Pushing for Better Shareholder Returns
-
Magnificent 7 Stocks Earnings Updates: AI Remains the Focus
-
Where We See Opportunities After an Ugly Month for Stocks
-
After Earnings, Is Alphabet Stock a Buy, a Sell, or Fairly Valued?
-
When Will the Fed Start Cutting Interest Rates?
-
What’s the Difference Between the CPI and PCE Indexes?
-
Berkshire Hathaway Earnings: Strong Insurance Results Continue to Lift Revenue and Profitability
-
10 Questions for Berkshire Hathaway’s 2024 Annual Meeting
-
After Earnings, Is Ford Stock a Buy, a Sell, or Fairly Valued?
-
3 Dividend Stocks for May 2024
-
Amgen Earnings: Obesity Drug Update Is Highly Encouraging
-
What’s Going on With Apple, Tesla, and Alphabet?
-
Apple Earnings: A Weak 2024, but Optimism for 2025
-
4 Utility Stocks to Play the AI Data Center Boom