Eric clapped on

FOR such an affable fellow, Eric Luciano Nicoli has a surprisingly thin skin. The balding, burly, blues-loving chairman of EMI should be able to take a little criticism in his stride, especially since he has endured so much of it during his three years at the helm of the world's thirdbiggest music company. But it clearly gets to him.

Nicoli, 51, announced last week that he would axe 1,800 jobs, a fifth of EMI's global workforce. He is also culling 400 artists from EMI's troupe of 1,600. Having 49 acts on its books in Finland alone, for example, was probably 48 too many. But the big names, such as Robbie Williams, Kylie Minogue and Lenny Kravitz, will remain and be given more chance to prosper.

The job losses were the most dramatic element in a plan drawn up by EMI's chief executive of recorded music, Alain Levy. Nicoli brought in the former PolyGram boss last autumn, if not to save the business, then certainly to salvage Nicoli's reputation.

Nicoli had presided over two failed merger attempts, with Warner Music and Bertelsmann's BMG. And then there was the debacle of paying Mariah Carey £38 million not to sing for EMI. She was bought out of her contract after album sales plummeted.

So why did things get so bad that the solution had to be so drastic - especially since EMI's share price, admittedly along with virtually every other major media company, had fallen off a cliff in the months before Levy's appointment?

Nicoli is unrepentant: 'I have heard it said that I should have acted sooner, but quite frankly that is absurd,' he says forcefully. 'Our results last year were the secondbest in the history of the group. We had gone up a point and a half in global market share; it would have made no sense to change things then.'

Besides, adds Nicoli, Levy was not available any earlier. But this sounds suspiciously as if Nicoli wanted to make changes when things were meant to be rosy. It hardly fits with his explanation for not acting sooner.

'I have known Alain since I've been chairman, but you should not walk away with the idea that I have been plotting this for years,' he says. 'The time was simply not right before.'

The aim now is to cut costs by nearly £100 million a year. Nicoli, who earns £1m a year, will invest the money saved in restructuring the business, which has issued two profits warnings in the past six months.

His intention is to create a music company like music companies used to be - with a galaxy of worldwide superstars rather than the lesser lights who cost a fortune but burn out in six months.

Nicoli says: 'The talent is there, it's always there. It's just that none of the music companies have been very good at finding and nurturing it in recent years.' His aim, too, is to prove his many critics wrong. After being thwarted twice by competition watchdogs in his attempts to grow by merger, Nicoli wants to show that EMI can thrive as a stand-alone music company.

'I've heard it said Bertelsmann is still interested in merging with us, but if they are they haven't shared that with me,' he says. 'The anti-trust rules have not changed. But to say we can't thrive on our own is utter crap. We are the world's biggest music publisher and the Number Three recorded music company.'

Nicoli's father, Virgilio, was an Italian prisoner- of- war who returned to Britain after the Second World War to farm. Nicoli took a different direction, scoring a first in physics at King's College, London.

When he became chief executive of United Biscuits at 40, he was the youngest head of a FTSE 100 company. The shine was knocked off his career at United Biscuits when he cut the dividend, making it the first British food company to do so in 17 years.

He says it was an appalling market and United Biscuits fared better than its peers under his control - the same argument he uses at EMI, where again he has slashed the payout to shareholders.

When he was appointed chairman by his flamboyant predecessor, Sir Colin Southgate, there was speculation that he had been chosen not to outshine the former chairman.

Whatever the truth, Nicoli is confident about the future. 'We need to be tighter, more focused,' he says. 'Alain's philosophy is the one we need now to return to growth.'

Nicoli, who has a reputation as a motivator, may have won a respite. But if his latest strategy for EMI does not strike a chord with disgruntled investors, he is likely to find himself with plenty of time to indulge his passion for listening to the likes of John Lee Hooker, Eric Clapton and Muddy Waters.