Piracy, decline of CD format, no big hits take toll
NEW YORK — Battered by a persistent slump in music sales industrywide this year, Sony Music is planning to lay off 100 staffers, or about 2% of its 5,000-employee U.S. workforce.
“Sony Music confirms it is redirecting its resources in order to maximize the efficiency of its operations and effectively meet the challenges of an evolving industry,” a rep said Thursday.
U.S. music sales were down about 5% in 2001 — the first decline recorded by sales-data collector SoundScan in its 11-year history — as on- and offline piracy, the decline of the CD format and a dearth of mega-hits all took their toll.
Sony Music was singled out as a soft spot in the fiscal first-quarter earnings release of its Japanese parent last month. The division’s worldwide sales for the quarter came in at $1.2 billion — down 5.6% from the same period a year earlier — while the bottom line swung to an $86 million operating loss from a modest profit the year before.
But Sony Music is likely to get a jolt — at least in the short term — next week. “The Rising” (Columbia), Bruce Springsteen’s first studio record in seven years, is widely expected to hit the U.S. album charts at No. 1, and sales could scrape the 400,000 mark.