Today EMI announced the dismissal of top executives Alain Levy and David Munns (read press release). Levy had been Chairman and Chief Executive Officer since 2001. Munns was Vice Chairman. Eric Nicoli is now the Chief Executive Officer of EMI Group and is in charge of the management of EMI Music. John Gildersleeve was named Non-executive Chairman of EMI Group. Martin Stewart, CFO of EMI Group, will take direct responsibility for the management and finance function of EMI Music.

The senior management changes are part of a larger restructuring program that is expected to save the company £110 million per year. The cost of the restructuring is expected to be no more than £150 million. Where will EMI save money? From the press release: "Specific fixed cost saving initiatives will include the reduction of front and back-office overhead and an increase in shared services in both divisions and across all regions."

Unnamed EMI executives told The New York Times' Jeff Leeds that Nicoli will lead a larger restructuring that will result in significant layoffs.

EMI warned that its second-half performance has been weak and annual revenues could be down 6% to 10%. The restructuring will constrain revenue through March 2008, but EMI expects an improvement in margins.

Why the change? Well, there are the failed attempts to acquire Warner Music Group, the poor performance by Janet Jackson's last album, the hire and fire of Jermaine Durpri at Virgin and lack of growth in the U.S. market. The press release names new points of focus that will be part of the Nicoli era. Digital growth, partnerships and consumer marketing are the three that really stand out. Those are three of the lynchpins to the new music industry, and this restructuring is an admittal that EMI has failed in those areas.