Island Def Jam begins layoffs

By Richard Driver

In addition to the losses incurred by Warner Music Group Corp. (NYSE: WMG) during the first quarter of 2007, the Island Def Jam Music Group has been carrying out layoffs this week according to Billboard.com. The Billboard article states that some of the officials are national directing staff, while others are members of internal creative and production departments. The biggest layoff though is the "Roc La Familia" staff, responsible for the international promotions of the company, according to the report. Island Def Jam is a member of the Universal Music Group, a subsidiary of the French Vivendi corporation (Euronext:VIV).


Though the rumored loss of 40 individuals is nowhere near the 400 lost by Warner, the fact that a second situation is developing so soon seems ominous for the record industry. It's also a notable move so soon after the re-establishment of historic Mercury Records as a new division within the group (that occurred on April 25). Mercury Records had existed prior to 1998, when it was absorbed by Island Records as a result of Polygram (it's former owner) became a part of Universal.

Both of these cases, with Warner as well, could be signs that either a major shift is on the horizon, or that music sales are slipping entirely. Unfortunately, the good news that accompanied Warner is not being repeated for Island Def Jam and the digital promotion departments are not being beefed up, at least not in these early rumors.