Tuesday, March 02, 2004

A letter to WMG employees from the new boss:

Dear Colleagues:
We are announcing today a series of necessary restructuring steps that are critical to the future of Warner Music Group. I want to outline them for you personally and share with you how they will affect our label structure, management team and employees. All of these steps are based on a careful and thorough analysis of all aspects of WMG's needs and operations, undertaken in close collaboration with the Company's senior management over the past few months. It is of the utmost importance that we make the necessary changes as quickly as possible so that Warner Music Group can begin to move ahead with increased strength and confidence as a more competitive, agile and efficient organization.
First, Lyor Cohen, our new Chairman and CEO of U.S. Recorded Music, will report to me and be responsible for all aspects of WMG's recorded music operations in the United States. Also reporting directly to me will be Paul-Rene Albertini, formerly President of Warner Music International, who will now run the Company as its Chairman and CEO, with responsibility for all of our international companies and affiliates in Europe, Latin America, Asia Pacific and Canada; and Les Bider, who will continue to provide his fine leadership as Chairman and CEO of Warner/Chappell Music, one of the world's pre-eminent international music publishing companies.
My other direct reports include all corporate staff, including Helen Murphy, Chief Financial Officer; Dave Johnson, Executive Vice President and General Counsel for the Company; and Will Tanous, who will lead our communications efforts as the new Head of Corporate Communications. Dawn Bridges will be leaving the Company after many years of exemplary service to our executives, artists and employees.
Reporting directly to Lyor will be Tom Whalley, Chairman and CEO of Warner Bros. Records; Scott Pascucci, President, Warner Strategic Marketing; and John Esposito, President, WEA Corp.
We are currently continuing our discussions with Roger Ames about a senior management role at the Company.
Second, we will begin consolidating our East Coast operations by merging the Business and Legal Affairs, Finance and Label Sales divisions at Elektra and Atlantic, and Lyor Cohen will lead both labels as interim Chairman. Atlantic Records founder Ahmet Ertegun will remain with the Company and help us continue the label's world-renowned legacy; however, Sylvia Rhone, Val Azzoli and Ron Shapiro will be leaving the Company. Their contributions to the Elektra and Atlantic labels over the years have helped to sustain Warner Music through very challenging periods, and I would like to thank them for all they have done to make WMG one of the world's leading music companies.
In order take full advantage of our opportunities for growth and success, we need to reduce our global workforce by approximately 20%, beginning today, and anticipate much of this will be completed within the coming month. All of our colleagues are being provided with substantial severance payments and separation packages. In most instances, these include significant support, such as outplacement assistance, to help with a transition to new employment opportunities outside the Company.
While most of the changes we anticipate making have been announced today, we are still working on a number of additional steps, including the management structure of our East Coast labels. We will announce these as quickly as possible.
These were not easy decisions to make, but I want to reiterate that these changes are essential for our ability to move forward together, to continue building on the extraordinary legacy of Warner Music and to ensure our future success. I also want to thank you for your flexibility, patience and focus during this challenging time as we work together to achieve these goals.
The talent, the resources and the creativity at Warner Music position the Company extremely well for the future, and I am excited about the new opportunities that lie ahead. I look forward to working with you in the weeks ahead as we begin this journey.
Edgar Bronfman, Jr.