Record label Warner Music Group, which early Wednesday laid off 270 employees, or about 4% of its global workforce, will "likely" retain employees involved in the company’s Web3 and AI-related initiatives, a person familiar with the matter told Decrypt

The label, home to major music artists including Cardi B, Ed Sheeran, Lizzo, Madonna, Dua Lipa, and The Red Hot Chili Peppers, announced a company-wide wave of layoffs in an email to employees from the label’s new CEO, former YouTube chief business officer Robert Kyncl. 

In my discussions with our leaders across the company, many of them came to the same conclusion–that to take advantage of the opportunities ahead of us, we need to make some hard choices in order to evolve,” Kyncl wrote in that email to Warner Music employees Wednesday morning, as first reported by The Hollywood Reporter

Warner Music Group’s next phase will be specifically focused on supporting “new tech initiatives” and “new skills for artist and songwriter development.” Those initiatives to be prioritized include the label’s recent Web3 efforts, as well as future experimentations with AI, a person close to the matter confirmed.


After the original publication of the story, which said that Warner Music would not lay off employees involved in its Web3 and AI efforts, a company representative clarified to Decrypt that the firm will "likely" not lay off those employees but could not provide finer detail on its plans.

In the past eighteen months, Warner Music has aggressively pursued partnerships and pilot programs with a plethora of Web3-native projects and companies, including NFT marketplace OpenSea, Polygon-based NFT music platform LGND Music, digital fashion startup DressX, and metaverse platform The Sandbox, among others. 

Whereas those efforts may have previously appeared to be assessments of Web3’s future potential in creating and disseminating music, Wednesday’s news more explicitly frames those experimental partnerships as Warner Music’s chosen path forward. 

Kyncl, who joined Warner Music from YouTube in January, is reportedly very technology driven in his leadership approach. To him, embracing cutting-edge technology will be just as important to Warner Music’s future as it was to YouTube, according to the same source familiar with the matter. YouTube, for its part, recently doubled down on its commitment to Web3 tie-ins with NFTs and the metaverse. 


Wednesday’s layoffs come at a time when tech and media companies across the board are slashing huge, often unprecedented portions of their workforces amid unrelenting increases in interest rates and souring economic conditions. Amid those layoffs, numerous companies have had to decide whether to continue to invest in experimental Web3 divisions, or cut them entirely. 

Yesterday, Disney slashed its entire 50-person metaverse unit amid a massive 7,000-person layoff. Google, on the other hand, notably spared its entire Web3 team when it let go of 12,000 employees in January.

Editor's note: This article was updated after publication to include clarification from a Warner Music representative.

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