Jobs Cut, N.Y. Office Closed in EMI Shake-Up

EMI Music said Tuesday that it will take a $192-million write-down to restructure its North American division--a move that includes the closing of its New York corporate office and the dismissal of more than a dozen employees, including two of its most senior executives.

EMI also disclosed that sales fell 3.7% last year to $5.9 billion, with pretax profit increasing 3.6% to $624 million. Shares in EMI, which split from consumer goods rental company Thorn in August, fell about 4% on the London stock exchange.

On Tuesday, the British conglomerate confirmed that Charles Koppelman, chairman of EMI’s North American division, and the division’s executive vice president, Terri Santisi, had left the company--despite having four years remaining on their contracts. More than a dozen other New York-based EMI employees were informed that they had lost their jobs when they reported to work Tuesday.

As part of the restructuring plan, Ken Berry, head of EMI’s international sector, will oversee EMI’s North American labels, Capitol, EMI and Virgin. The London-based Berry, who will take on the new title of president of EMI Recorded Music, is expected to run the company from his Los Angeles office.

The shake-up follows an internal corporate edict issued two weeks ago demanding that all label chiefs reduce costs and postpone any plans for major expenditures.

Koppelman, who was promoted five years ago to run EMI’s stagnant North American operation, had little success in rejuvenating its U.S. labels. Koppelman spent millions of dollars restructuring Capitol and EMI, but his executive team of Gary Gersh, Davit Sigerson and Tom Zutaut had little luck in breaking new acts.

During his tenure, Koppelman was praised for developing unique marketing strategies that helped bolster sales of the company’s deep Beatles and Sinatra catalogs. But he was unable to keep the company from being ranked last of the six major music companies in current U.S. album market share in 1996.

EMI last fall renewed the 59-year-old Koppelman’s contract for five years. It is unclear what caused the company’s change of heart. Sources said Koppelman is expected to receive a multimillion-dollar severance package.