EMI Group Plc, the music company bought last year by private equity financier Guy Hands, will cut as many as 2,000 jobs after a slump in music sales led to a record loss.

The revamp will help to cut costs by as much as 200 million pounds (US$392 million) a year, EMI said, Bloomberg News reported. Hands will cull between 1,500 and 2,000 out of EMI's 5,500 jobs.

"Guy Hands faces an enormous challenge," Anthony De Larrinaga, an SG Securities analyst in London who covered EMI in the past, said. "EMI has been a laggard for quite some time and he needs to cut costs, expand the digital business, find new successful artists and identify the right market trends."

Some artists have protested Hands's overhaul efforts, including Robbie Williams, whose manager said last week the singer may withhold his next album. The cuts focus on recorded music, which is less profitable than publishing. Hands wants to make more money from the back catalogue at EMI, the label of Norah Jones and the Beatles, by digitizing recordings.

Hands will present his plan to employees, performers and their managers at a cinema in London. EMI will reduce expenses by merging the sales and marketing units for its labels, which include Capitol, Parlophone, Blue Note and Virgin.

EMI's reductions come as music companies wrestle with a decline in global recorded music sales because of piracy and illegal downloading of songs over the Internet. Almost a third of the albums sold worldwide are counterfeit, according to the International Federation of the Phonograph Industry. About 20 billion music files were downloaded illegally in 2006, the federation found.

EMI "has been struggling to respond to the challenges posed by a digital environment," Hands said in the statement. "We believe we have devised a new revolutionary structure for the group that will improve every area of the business."

Terra Firma Capital Partners Ltd, Hands's London private equity firm, bought EMI for 2.4 billion pounds in August. The deal ended seven years of attempts by EMI and Warner Music Group Corp to buy each other. Yesterday's plan came after a three-month study, according to the statement.

EMI said its labels will invest more in new artists and maximize the potential of the existing roster. EMI also will help performers earn more from "new income streams" such as digital services and corporate sponsorships.

Some of EMI's best-known artists have made known their discontent. Tim Clark, Williams's manager, told the Times last week that Hands was acting like a "plantation owner" who had stumbled into the record industry via a "vanity purchase."

Coldplay, the UK band, is in "no hurry" to deliver a new album now that Tony Wadsworth has resigned as chief executive for the UK and Ireland, the band's manager, Dave Holmes, told the Daily Mail last week.