Warner Music Group Corp. is set to lay off around 10% of its workforce, approximately 600 employees, as part of an extensive restructuring plan. The aim is to increase investment in music and drive growth within the company.

According to a filing made late Wednesday, Warner expects this plan to result in annual cost savings of about $200 million by the end of fiscal 2025. This move follows similar recent decisions made by Snap Inc., Wayfair Inc., and Okta Inc. to downsize their workforces.

The company plans to allocate the majority of these cost savings towards enhancing their “core recorded music and music publishing businesses, new skill sets, and tech capabilities,” as stated by Warner.

As part of the restructuring, Warner will discontinue or phase out certain non-core operations and media properties, including the in-house ad-sales team. The layoffs will primarily be linked to these changes.

Warner predicts that severance and other layoff costs will total around $85 million, with payments expected to be completed by the end of fiscal 2026. The bulk of these charges will occur by the end of this year.

Overall, the company estimates that there will be approximately $120 million in one-off pre-tax charges for fiscal 2024, resulting in roughly $90 million after taxes.

Following this news, Warner Music’s stock surged more than 6% in extended trading, effectively erasing its earlier decline of 0.6% during regular trading. Over the past 12 months, Warner’s stock has experienced a decrease of around 1%, while the S&P 500 index has seen gains of about 20% within the same period.

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