Capitol Records yesterday began the changes expected in the wake of Charles Koppelman’s ascension to chairman of EMI Records Group North America, laying off an undetermined number of staffers and reportedly dropping several acts.

Simon Potts, Capitol senior VP of A&R, was the most prominent executive to exit yesterday. The company said Potts, who has been with Capitol Records for six years, left upon expiration of his contract and that no replacement will be named. The A&R department has been under Capitol president/CEO Hale Milgrim’s control since last October.

More layoffs are expected today, but employees will likely be looking over their shoulders for several months. Koppelman is expected to continue to tighten the fiscal belt when he takes formal command April 1 of the Capitol-EMI Music empire formerly under the purview of Joe Smith.

Yesterday’s announcement concerned layoffs only at Capitol Records. Overall cuts at Capitol-EMI are not expected to be as severe as the double-digit axings made when Koppelman took over the EMI Records Group two years ago.

Koppelman was in Toronto yesterday and did not return a call seeking comment. Sources within the company said he was likely to be aiming for a employee reduction in the neighborhood of 10%, a body count that may be achieved through a combination of layoffs and attrition. The overall number of Capitol employees was unavailable.

Capitol also offered no comment on acts allegedly dropped from its roster, but sources contended that as many as a dozen may be lopped in the coming weeks.

EMI Music consolidates its operations under Koppelman April 1, the beginning of its fiscal year. Previously, Koppelman ran most of the company’s East Coast operations and Smith the West, both reporting to EMI Music president Jim Fifield. Virgin Music, acquired last year by Thorn-EMI, remains a stand-alone company.

Capitol-EMI Music includes Capitol Records, Liberty Records, Capitol-EMI Canada, Angel Records, Blue Note Records, Capitol-EMI Latin, the CEMA distribution arm and North American manufacturing. EMI Records Group includes SBK, Chrysalis and EMI Records. Koppelman was named chairman/CEO of the consolidated EMI Records Group North America two months ago (Daily Variety, Jan. 7).

“In anticipation of the beginning of its new financial year, Capitol Records has taken the opportunity to review its organizational structure, with the result being the elimination of positions,” Capitol said in yesterday’s statement.

“We wish all those affected the best in their future endeavors.”

Capitol has had moderate success of late. The label has five albums in Billboard’s top 100, including Duran Duran at No. 21, Poison at No. 55, Paul McCartney at No. 69, Megadeth at No. 74 and Portrait at No. 96. The roster includes such developing artists as Blind Melon, Charles & Eddie, and the Cages.

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