UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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ITEM 2.05. COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES.
On March 29, 2023, Warner Music Group Corp. (the “Company”) announced moves designed to drive the evolution of the Company.
The Company expects to reduce headcount by approximately 270 people, or approximately 4% of the Company’s overall headcount. The headcount reductions should be substantially completed by the end of the next fiscal quarter. As a result, the Company expects to incur total non-recurring restructuring charges in this quarter of approximately $46 million on a pre-tax basis for severance payments and other related termination costs. The Company anticipates that the headcount reductions will result in cash expenditures of approximately $46 million by the end of fiscal year 2024.
The Company expects the headcount reductions to generate pre-tax cost savings of approximately $22 million in fiscal year 2023 and $50 million on an annualized run-rate basis in fiscal year 2024.
The Company anticipates investing a portion of the cost savings from the headcount reductions in an amount to be determined for targeted hires, to add new skill sets and for other initiatives intended to position the Company for long-term growth.
This Item 2.05 contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements related to expected costs and expected cost savings. These forward-looking statements are based on the Company’s current expectations and inherently involve significant risks and uncertainties. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to cost reduction efforts. In addition, the Company’s restructuring costs may be greater than anticipated and the headcount reductions may have an adverse impact on the Company’s business. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations. Please refer to our Form 10-K, Form 10-Qs and our other filings with the U.S. Securities and Exchange Commission concerning factors that could cause actual results to differ materially from those described in our forward-looking statements.
ITEM 7.01 REGULATION FD DISCLOSURE.
In connection with this announcement, the employee communication furnished herewith as Exhibit 99.1 was sent by Robert Kyncl, the Company’s Chief Executive Officer.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
| Exhibit No. | Description | |
| 99.1 | Employee Note from CEO Robert Kyncl | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WARNER MUSIC GROUP CORP. | ||||||
| Date: March 29, 2023 | By: | /s/ Eric Levin | ||||
| Eric Levin | ||||||
| Chief Financial Officer | ||||||