Utopia Music battles allegations of massive tax debts as prepares to lay off another 15% of its global workforce.
Swiss tech company Utopia Music is gearing up to eliminate around 15 percent of its global workforce in a fresh round of job cuts, according to leaked correspondence. The company’s co-founder and interim CEO Mattias Hjelmstedt shared the grim news Monday in an internal memo to staff, according to a letter obtained by Billboard.
Hjelmstedt says in the memo that Utopia’s distribution companies are not affected by the layoffs, including Proper Music Group — the UK-based independent physical music distributor — and Cinram Novum, which provides warehouse, fulfillment, and distribution services to a label roster that includes Universal Music Group, Sony Music Entertainment, and [PIAS].
The latest round of layoffs will be the second chop at Utopia in the past six months. The company cut its workforce by approximately 20 percent in November, affecting around 230 jobs.
Those cuts were followed in December by restructuring Utopia’s business into two separate divisions — Music Services and Royalty Platform — and the exit of former CEO Markku Mäkeläinen in January. Most recently, UK-based Robert Neri announced that he would also leave his position as CEO of Utopia’s Music Services division to join Believe, a French music company.
Meanwhile, reports have surfaced that some Utopia employees have yet to be paid, and the company’s Swedish unit, Utopia R&D Tech, owes 8 million SEK ($770,000) to Swedish tax authorities.
“All outstanding tax debts have been cleared, including our financial obligations in Sweden,” said Hjelmstedt. “We continue to actively work on this process to ensure that we never find ourselves in this position again.”
Hjelmstedt added that the company would soon share information about “commercial initiatives, deals, and sales strategies” to drive future revenue growth.
“Utopia was meant to be a high-impact company, and we have attracted extremely talented people who we truly appreciate and respect,” he concluded. “That’s why this decision is so hard to make.”