AEG Worldwide, the holding company of the second largest concert promoter in America, will significantly cut staff because of the economic impact of the COVID-19 pandemic.

In a company-wide memo sent to employees Monday and obtained by The Times, Chief Executive Dan Beckerman wrote, “This global pandemic has disrupted everyone’s lives, and shelter orders, while being critical to leveling curves, have dealt with devastating blows for our business. It is clear now that live events with fans will not continue for months and possibly not until around 2021, so we are faced with no easy choice.

The cut, according to the memo, will include a combination of layoffs, leave and salary reduction that will take place July 1.

“We have taken extreme steps to cut costs and keep jobs. We instituted a 20% reduction in overall salaries, we drastically cut costs and we eliminated all unnecessary projects, investments and capital expenditures, “Beckerman said. “But we have never experienced a time like this, where our operations stopped completely because the power was out of our control.

“Our business was the first to be closed,” he continued, referring to the postponement of state-mandated meetings, including tours for Justin Bieber and Billie Eilish, “and unfortunately will be the last to reopen, despite the drastic actions we took to avoid staff reductions. , unfortunately it’s clear that this step cannot be avoided. “

Sources in AEG Presents who are aware of the plan say that the exact amount and scope of deductions are still being finalized and that they cannot provide exact figures.

The LA-based company, founded by Denver billionaire Philip Anschutz (with an estimated value of close to $ 12 billion), has nearly 30,000 full-time and part-time employees and has a number of well-known places, including the Staples Center in downtown LA and the Dignity Health Sports Park in Carson. The company also has L.A. Kings and one third of L.A. Lakers.

Until COVID-19, the concert business was running fast, according to industry analysts at Pollstar, who had projected direct income of $ 12.2 billion this year. While AEG Presents has not yet made an official announcement about the fate of the Coachella Valley Music & Arts Festival, which is rescheduled for October, some industry experts hope to proceed as planned this year.

“Until all this shakes, you never know where it will land,” said one source within the company, because the person was not authorized to discuss the plan. “We don’t have revenue dollars in 3 1/2 months, and we do everything we can to keep the company intact. [Other firms] all did this two months ago, and we last as long as possible. The unfortunate part is that no one knows when we will return. “

The source stressed that laid off workers would receive a competitive severance package and that workers who were still on leave would continue to receive health insurance.

The cuts will affect all AEG Worldwide divisions, not just the AEG Presents specifically the concert, which is the holding company of promoter Coachella Goldenvoice. Representatives for AEG Worldwide, which include sports, facilities and real estate divisions, confirmed plans for staff cuts throughout the company but would not specify exact figures.

Specifically regarding his concert business, Jay Marciano, chief executive of AEG Presents, said in his own company’s memo Monday, “Today’s e-mail is the most difficult I have ever written.”

“I think it is no exaggeration to say that, just a few months ago, no one in our business or any business can predict where we will be today,” he added. “The world has changed with an impact and scope that is impossible to understand. I wish I could tell you when it will be safe to reopen. At present, it seems that large-scale events – the core of our business – will be the last to reopen. ”

Live Nation, the country’s biggest promoter and main rival to AEG Presents, announced in April that it had lost 20% of its staff, along with a 50% salary cut for executives. Chief Executive Michael Rapino turned down salaries for the remainder of the leave period. Talented agents such as WME and Paradigm announced deep cuts to staff this spring due to the impact of COVID-19.

While the reopening policy varies from state to state, the return of large gatherings such as concerts will be in the final stages of Gavin Newsom’s four-step reopening plan for California.

“I want to go home one thing: no one feels responsible, that they can do something different, or that they can be better prepared,” Marciano wrote in his memoir. “I know this might sound obvious, but in the coming days and weeks please remember, this is not your fault.”