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AEG announces redundancies and other cutbacks as COVID-19 shutdown continues

By | Published on Tuesday 9 June 2020


The second biggest live music company in the world, AEG, has announced that some significant cuts now need to be made to the business as it continues to deal with the impact of the COVID-19 shutdown. Although specifics are not yet clear, there will be redundancies, while others will be furloughed or subject to further pay cuts, with the measures affecting all of the live entertainment firm’s divisions, including festivals, concerts and venues.

In a memo to staff, CEO Dan Beckerman said that previous efforts to mitigate the impact of the COVID-19 shutdown are now not sufficient. He wrote: “We have gone to extreme measures to cut costs and preserve jobs. We instituted a 20% across-the-board reduction in salaries, we drastically cut expenses and we eliminated all unnecessary projects, investments and capital expenditures. But we’ve simply never experienced times like these, in which our operations have come to a complete stop due to a force beyond our control”.

Elsewhere he wrote: “This global pandemic has disrupted life for everyone, and the shelter-in-place orders, while critical to flatten the curve, have dealt a devastating blow to our businesses. It is clear now that live events with fans will not resume for many months and likely not until sometime in 2021, so we are faced with no easy options”.

“Our businesses were among the first to close”, he added “and unfortunately will be among the last to re-open. Despite the drastic measures we’ve taken to avoid staff reductions, unfortunately it is clear that this step is unavoidable”.

A separate memo from the CEO of concerts division AEG Presents, Jay Marciano, stated: “I don’t think it’s an overstatement to say that, just a few short months ago, nobody in our business or any business could have predicted where we would be today. The world has changed with an impact and scope that’s impossible to fathom. I wish I could tell you when it will be safe to reopen. At present, it appears large-scale events – the core of our business – will be the last to re-open”.

“We did not come to today’s decisions lightly”, he went on. “During the last few months we kept our company intact to ensure that those of you who would be the most affected would have the best safety net we could provide. While it’s small solace, I see this as a testament to the culture that exists at AEG and the important role you have played in building this environment”.

One unnamed source told the LA Times that those AEG employees now facing redundancy will receive “competitive severance packages” and that furloughed workers will continue to receive health coverage, which is always a big concern for US-based employees in particular.

“Until this all shakes out, you never know where it will land”, the LA Times’ source added. “We haven’t had a dollar of revenue in three and a half months, and we did everything we could to keep the company intact. [Other firms] all did this two months ago, and we held on as long as could. The unfortunate part is nobody knows when we’ll be back”.

Companies across the live sector – including promoters, venues, ticketing firms and booking agents – have all faced huge challenges in recent months, of course.

Most have utilised government support schemes in those countries where they are available, seeking to furlough staff rather than make them redundant. Though, as the shutdown stretches on, and with much uncertainty remaining as to what kinds of live entertainment will be able to resume when, more significant and long-term cuts are likely inevitable.

AEG’s main rival Live Nation announced a series of measures in April designed to help it weather the COVID-19 storm, including hiring freezes, reducing its use of contractors, seeking to renegotiate rents, utilising all available government support schemes and salary reductions. That included senior execs taking a 50% cut in the short term and CEO Michael Rapino forgoing his salary entirely while shutdown continues.