As Warner Music Group initiates a sweeping restructuring plan aimed at cutting annual costs by approximately $300 million, the company is dismantling its traditional leadership hierarchy in favor of a flatter organizational structure.
The change, which includes $170 million in savings from “headcount rightsizing” and an additional $30 million from administrative costs related to staffing, represents a significant shift in how the music giant operates globally.
The restructuring coincides with major leadership changes, most prominently the departure of Max Lousada, who is stepping down as CEO of Recorded Music at the end of the fiscal year.
Julie Greenwald’s shift to Chairman of Atlantic Music Group and Elliot Grainge’s appointment as CEO of the same division signal a new era for the company’s executive team, with roles being realigned to support more direct interactions between local and global operations.
These organizational changes come against a backdrop of mixed financial performance.
While Warner Music Group reported a 9% increase in total revenue for the third quarter and an 18% increase in Adjusted Operating Income Before Depreciation and Amortization to $373 million, the company also experienced a net loss of $16 million, compared to a $141 million net income in the prior year.
The new structure aims to elevate creative regional leadership, particularly in Europe, and integrate global services more closely with regional operations.
By flattening hierarchies, Warner Music hopes to create more direct channels between local talent and global opportunities, leveraging local expertise while maintaining global reach and influence.
Despite the substantial cost-cutting measures, the company plans to increase investments in its artists and repertoire department.
The restructuring is expected to free up funds for music investments and mergers and acquisitions, supporting Warner’s strategy to expand its catalog and strengthen its market position across genres.
CEO Robert Kyncl has promised to communicate with empathy and integrity throughout the restructuring process to address employee concerns and uncertainty.
The reorganization eliminates the CEO of Recorded Music and President, International, Recorded Music roles, with EMEA operations now being overseen by Simon Robson.
Industry analysts view this reorganization as Warner Music’s effort to foster a more innovative and collaborative organization capable of adapting to rapidly evolving global market trends in the music industry.
The company is also exploring opportunities to help its artists develop sync deals as an additional revenue stream during this transitional period.
Warner plans to leverage social media platforms to enhance artist visibility and engage fans more directly as part of its modernized promotional strategy.
