EMI's new owner, Terra Firma, confirmed this morning that it will cut between 1,500 and 2,000 jobs and strip out many of the functions previously given to the company's record labels, including Parlophone in Britain and Capitol in the United States.

The private equity firm's plans, which will see nearly a third of the music major's workforce lose their jobs, are aimed at eliminating "significant duplications" to save £200 million a year.

One-off costs of achieving the savings were not detailed today. These could amount to £40 million, assuming an average severance cost of £20,000 per employee.

Terra Firma will spend today selling its plans to the company's artists after this morning meeting with its employees to discuss today's announcement.

Some of its star performers, headed by Robbie Williams, are in open revolt against the new management.

Guy Hands, chief executive at Terra Firma and chairman of EMI, said today: "We believe we have devised a new revolutionary structure for the group that will improve every area of the business".

Terra Firma bought EMI for £2.1 billion last year, at a time when the company was losing market share in a weak market. The private equity owner now wants the record labels to focus on finding new acts and handling artists, while marketing, sales and other functions are centralised on a country-by-country basis.

It hopes that the new structure will be more artist-friendly. The company also wants to help develop as yet unspecified "enhanced digital services" and corporate sponsorship arrangements.

Mike Batt, deputy chairman of the BPI and founder of Dramatico, the independent label which discovered pop chanteuse, Katie Melua, said: "There are music people hoping Guy Hands will fail but they are misguided. There's no reason people from outside the industry can't find a fresh model to take us into the digital future.

"But I think he has made a mistake in losing Tony Wadsworth (UK music boss who left last week) because he commands a lot of respect."

Mr Batt said he hoped EMI's famous imprints such as Parlophone, home of the Beatles, did not lose their character as operations are merged.

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