NEW YORK - Universal Music Group (UMG) will cut jobs and streamline operations to save €250 million (S$364 million) by 2026, the company said on Feb 28, after it failed to reach a new licensing deal with social media platform TikTok.

The first phase of the plan, in effect immediately, targets savings of €125 million by 2025, including €75 million in 2024, the company said.

The deal with TikTok, which expired on Jan 31, generated about 1 per cent of UMG’s total group annual revenue, it said. The licence failed to be renewed over disagreement about artist and songwriter compensations, among other issues.

UMG is the parent of Universal Music Publishing Group, which represents an expansive roster of artists such as Taylor Swift, Jon Batiste, boygenius and Ariana Grande.

Asked about the dispute with TikTok, UMG chairman and chief executive Lucian Grainge said the group hopes to be able to find solutions.

“We’re friendly people that like win-win situations. My phone is open… 24 hours a day,” Mr Grainge added.

UMG said for now it sees no “discernible negative impact” from the non-renewal and is focusing on partnerships with YouTube, Meta, Snap and other social video platforms as they achieve much greater monetisation.

“If consumption shifts from TikTok to other short-video platforms like Reels or YouTube shorts, we believe that we can recapture some lost revenue,” executive vice-president and chief digital officer Michael Nash said on a call after UMG released quarterly earnings.

UMG posted a 9.2 per cent year-on-year increase in adjusted core profit to €677 million in the fourth quarter, as revenue rose 9 per cent to €3.21 billion.

It proposed a year-end dividend of 27 euro cents per share, bringing total dividend payout in 2023 to 51 euro cents per share. REUTERS