After yesterday's announcement of the newly formed Capitol Music Group, there are questions about what artists will remain, how many employees will be laid off and what will become of Capitol's Los Angeles operations.

The Los Angeles Times' Geoff Boucher wrote about concerns about Virgin's location and upcoming layoffs. "Capitol staffers who didn't want to be identified because of the sensitive situation said they feared major job cuts were coming, noting that some employees were being told that they would have to interview to keep their jobs." Those fears are reasonable. The terms restructuring and cost-cutting are business euphemisms for layoffs.

In an email to employees, EMI head Eric Nicoli wrote, "We will maintain operations in both New York and Los Angeles." Jason Flom, who will run Capitol Music Group, currently works out of Virgin Records' New York office. Personally, I think EMI should retain as much of a presence in Los Angeles as possible. A bi-coastal office is usually not a good idea, but the company needs a strong base in that market and on the West Coast.

The Tennessean's Ryan Underwood covered the news from a Music Row point of view. "EMI Group’s decision this week to merge its Capitol and Virgin labels in the U.S. won’t cause any ripple effects on Music Row," he wrote.

The New York Times' Jeff Leeds reported that Capitol president Andy Slater "is expected to receive a payout that could exceed $15 million."

For forum gossip, read The Velvet Rope's thread on the merger. There is talk of cuts at EMI-owned Astralwerks and Caroline Distribution, and discussion on whether or not EMI would back out of its deal with recent signing Interpol (I highly doubt it).

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