(Bloomberg) -- Universal Music Group NV, the record company behind Taylor Swift and Drake, plans to cut hundreds of jobs in the first quarter of the year, according to people with knowledge of the matter.

The company’s biggest division, recorded music, will be hit the hardest, said the people, who weren’t authorized to speak publicly and asked not to be identified. Universal Music, the world’s largest record company, had about 10,000 employees at the end of 2022, according to filings.

After years of double-digit growth fueled by the proliferation of paid streaming services, sales in the music industry have slowed. Universal Music’s revenue climbed just 3% in the third quarter of 2023 — a fraction of the year-earlier gain — and was forecast to advance at the same rate in the fourth.

“We are creating efficiencies in other areas of the business so we can remain nimble and responsive to the dynamic market, while realizing the benefits of our scale,” the company said in response to questions about the layoffs.

Universal has been investing in new growth initiatives, including geographic expansion and direct-to-consumer sales, while continuing to develop new artists, according to the statement.

Universal Music Chief Executive Officer Lucian Grainge has tried to boost the business by adjusting the terms of the company’s deals with major streaming services and urging them to weed out fraudulent activity, such as AI-generated fakes or bots that divert royalties from their artists. Executives have also pushed the platforms to increase prices.

Those initiatives will take a while to have an impact, and Grainge can satisfy shareholders in the interim by trimming costs. Management referred to cost-cutting plans during an October earnings call, saying they will deliver an improvement in profit margins. “Cut to grow” is what Grainge called the program.

“We will cut overhead in order to grow it elsewhere,” he said on the call. “We do have experience in managing the business, in managing the teams, and the businesses within that make up the group, and we’ve got a plan.”

The Universal Music’s reductions are part of larger retrenchment in the media and technology industries. Amazon.com Inc. announced hundreds of jobs cuts this week spanning from its TV and film studio to its Twitch streaming service. Other businesses initiating or planning layoffs include Comcast Corp.’s NBC News, chat service Discord Inc. and Walt Disney Co.’s Pixar studio.

Read More: Amazon, Google Job Cuts Jolt Silicon Valley at Start of 2024

Universal Music’s competitors have also cut jobs in the past year. Warner Music Group Corp. reduced staff by around 4% last March to “take advantage of the opportunities ahead,” according to a memo sent by CEO Robert Kyncl at the time. 

Warner and Universal both went public in the last five years, placing more pressure on their leaders to deliver growth. Universal has had a run of success with hits from Swift, the Weeknd, Billie Eilish and Olivia Rodrigo.

--With assistance from Kamaron Leach, Cecilia D'Anastasio and Thomas Buckley.

(Updates with company response starting in fourth paragraph.)

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