A union representing American employees at music distributor DistroKid has said that the company plans to lay off about 50% of its unionised staff this weekend. It follows a previous statement revealing that 37 employees had been placed on “administrative leave” less than an hour before negotiations between union representatives and DistroKid’s lawyers were due to begin.
In a new update on Instagram, the union says “DistroKid plans to lay off 50% of its unionised staff on 2 Nov. This decision impacts 37 dedicated employees, including five of the seven bargaining committee members. No non-union staff have been placed on administrative leave”.
While there has been lots of downsizing in the music industry in the last year, the potential PR damage is higher for those companies that work directly with independent artists, and even more so when it involves going into battle with a union.
Bandcamp had a similar PR challenge when it instigated job cuts following a change in ownership last year, with the downsizing being heavily criticised by the union that represented its employees.
The PR damage can also be higher if a company has actually seen significant growth, or if it is concurrently expanding its team overseas, or if it’s previously bigged up its ethical credentials, all of which apply to DistroKid, according to its employees’ union.
“Despite making more money than ever before”, it says in its social media post, “the billion-dollar music giant plans to lay off the entire customer support team in order to replace them with overseas labour”.
“These layoffs aim to save a few million dollars, less than 0.2% of its $1.3 billion valuation”, the union adds, while claiming employees have been told the savings will be used to pay for more marketing.
DistroKid previously “preached of doing right by their artists and their employees”, the union says, “many of whom began their journey with the company as DistroKid customers themselves”. But, “things have turned on a dime with only a week’s notice”.
According to Billboard, the job losses will affect people working in DistroKid’s quality control and customer service teams, with more of that work being shifted to third party providers, especially outside the US. In its statement, the distributor is keen to position the move as an effort to better support the artists that use its services, with a global team making it easier to offer that support 24/7.
Its statement reads, “DistroKid is committed to continuously enhancing support for independent artists around the world by expanding to 24/7 customer service with faster response times”.
“To achieve this”, it adds, “we have identified solutions that allow us to deliver more scalable and exceptional service, ensuring that artists around the globe receive the high-quality support they deserve. This includes considering difficult decisions that may affect valued team members as we continue our focus on providing the best artist experience possible”.