The CEO and CFO of listed music firm 7digital have stepped down just two days after a new chairman was appointed.
CEO John Aalbers and CFO Julia Hubbard have left their roles with immediate effect after eMusic.com president Tamir Koch was appointed chairman of the digital music platform.
Albers only joined as CEO in April after Simon Cole announced he was stepping down to concentrate on other business interests.
In a statement to the London Stock Exchange, 7digital said the changes were the result of cost savings.
Paul Langworthy, the company’s current COO, will become CEO and a director of the company. Aalbers will help with the transition over the next three months.
“When I joined 7digital in April this year the team and I were immediately challenged with the financial difficulties faced by the company,” said Aalbers.
“We urgently set about looking for ways to refinance the business through a combination of asset sales and fundraising.
“Three and a half months on, we have largely completed the rescue by securing a new, strategic majority investor, which has stated that it is prepared to invest further funds.
“The final phase of the fundraising is in progress and we expect an additional £4.5 million to be raised in the coming weeks.
“These funds will provide the company with the necessary resources to implement the revised strategy and put the company on a solid path towards both growth and profitability. Nevertheless, the company needs to further consolidate and control our operating costs to support the new model.
“To this end, Julia Hubbard and I have reached the conclusion, and the board agrees with our recommendation, that it would be in the company’s interest for me and Julia to step down.
“Alongside other cost-cutting initiatives already in motion, this will save the company close to £1m per annum, reducing cash burn in the most effective way.”
Michael Juskiewicz, the current CFO of eMusic, will be taking on the same duties at 7digital and be assisted by Julia Hubbard until mid-September.
Hubbard will remain as a director of the company until a UK-based finance director can be secured, while Aalbers’ directorship has ended with immediate effect.
Koch, a tech entrepreneur of 24 years with two successful exits, sees the 7digital platform as a “perfect partner” for eMusic’s blockchain technology.
The company has access to over 70 million music tracks, with a million tracks added each month.
“I’d like to thank John for his leadership and Julia’s strong support in meeting the financial challenges faced by 7digital and for successfully steering the company through these rough waters to safety,” said Koch.
“I also thank John and Julia for continuing to advise and support the company during the upcoming months to ensure a smooth transition to Paul and Michael.”
Langworthy stated: “It’s certainly been a challenging period for 7digital but we are now emerging from that with a clear sense of purpose and excitement. We have a well-defined strategy and we are very determined to execute it.
“I’m looking forward to taking over the reins from John with whom I have enjoyed working immensely.
“My confidence in our success is founded on both our new board, whose ambition and vision will drive the company forward with real energy, and on our talented team, who have shown enormous resilience during these difficult times.
“We are ready to take the company forward as we enter an exciting new chapter.”