Jul 26, 2023 2 min read

Utopia group salaries delayed, suppliers told invoices will be paid when company raises funding

Utopia group salaries delayed, suppliers told invoices will be paid when company raises funding

There have been further developments at Utopia Music. CMU has learnt that staff at the company have been emailed today by co-founder and CEO Mattias Hjelmstedt giving them the heads-up that there is a “slight delay” in processing the payment of July salaries, but reassuring employees that the future holds “great promise”.

Sources close to former staff members have told CMU that it’s not the first time wages at the group’s companies have been delayed, and that, in fact, late salary payments have been a problem for some time. Suppliers of services to Utopia-owned companies have further confirmed that requests for payment of outstanding invoices have been delayed, with Utopia staffers saying that payments would be made “once Utopia secured further funding”.

This news comes after CMU revealed that Utopia has called in the liquidators at its UK R&D entity, and that its Finnish R&D company has also been placed into bankruptcy.

Sources say that those who specifically worked for Utopia UK (R&D) Ltd have been told to “speak to the liquidator” about salaries owed. Although Utopia has said that it has engaged an “independent entity” to provide “specialised assistance to each employee in claiming their entitlements”.

Asked about the email circulated to staff, a Utopia spokesperson said: “Unfortunately, there have been some hiccups in internal processes due to our transformation efforts. We are actively working on resolving all of them, and all employees are in the process of being paid”.

The delay in salary payments does not extend to employees working for Proper Music, or to employees who formerly worked for Cinram who are now employed by Utopia Distribution Services Limited, the company which acquired the assets and business of Cinram. Drew Hill, MD of Proper Music Group and VP Of Distribution at Utopia Music, confirmed that there are “no issues with salary payments at either Proper Music Group or Utopia Distribution Services”.

As for the overall solvency of Utopia Music AG – the Swiss parent company of the group – Utopia’s spokesperson reiterated a statement made to CMU earlier today, saying: “As a principle, we – as a non-listed company – do not answer questions regarding our financials as they are subject to external audit and shareholder approval. However, part of the reason that the R&D entities were closed down was to safeguard our global operations”.

With a headcount rumoured to have been in excess of 1000 at its height – and a company focus that relies heavily on skills that are in high demand – wages are presumably a significant part of the company’s outgoings. Company accounts filed by the Finnish R&D entity show wages and other staffing-related costs for that company alone were €5.15 million in 2022.

Utopia has been downsizing rapidly in recent months which will have reduced running costs, but with salaries delayed as people head off for summer holidays, staff discontent is growing by the day.

Want to get in touch about this story? Message us confidentially on Signal using +447840838725

Update 27 Jul, 3.25pm: Clarification that Proper and Utopia Distribution Services are separate companies and that UDS took over the business and assets of CINRAM from the liquidators of that company.

Great! You’ve successfully signed up.
Welcome back! You've successfully signed in.
You've successfully subscribed to CMU.
Your link has expired.
Success! Check your email for magic link to sign-in.
Success! Your billing info has been updated.
Your billing was not updated.
Privacy Policy