updated 3/31/2004 8:05:50 AM ET 2004-03-31T13:05:50

Music company EMI Group PLC said Wednesday it will slash staffing by 20 percent in its recorded music division, largely because it is ceasing manufacturing CDs and DVDs in the United States and Europe.

In addition to cutting 1,500 jobs, EMI also said it planned to trim its global artist roster by 20 percent, largely by dropping “niche and underperforming artists” mainly in continental Europe.

The London-based company will shut plants making CDs and DVDs in Jacksonville, Ill. and Uden in the Netherlands, and outsource its manufacturing in Europe and the United States. That will result in about 900 jobs being cut.

EMI said the decisions were part of a “continuing drive to maximize efficiency and effectiveness in the changing global music marketplace.”

The company didn’t specify where the other 600 job cuts were being made. It expected the cuts to yield savings of $91.5 million a year.

EMI said sales for the year ending March 31, 2004 were close to the previous year’s level, and added it would publish its annual results on May 24. In the year to March 31, 2003, EMI recorded sales of 2.17 billion pounds, down 11.1 percent from the year before.

“In the financial year just ending, we have outperformed the industry on the most important measures,” EMI chairman Eric Nicoli said. “In recorded music, we have enjoyed market share gains, with sales for the full year close to last year’s level.”

In the Netherlands, CD and DVD manufacturing will be outsourced to MediaMotion and staff at EMI’s Uden plant will be transferred to the same company.

In the United States, Cinram International Inc. will make CDs and DVDs for EMI companies currently supplied by the Jacksonville plant. EMI said staff at the Illinois facility had been given notice of the job cuts.

EMI is maintaining its joint-venture manufacturing facilities in Japan and Australia, and a small facility in Canada.

The company also said that in several smaller countries it was consolidating its marketing through a single department. It will merge several smaller labels: the new age label Higher Octave was being combined with Narada, while the Christian music labels Sparrow and Forefront were being merged.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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