Music giant EMI is to axe up to a third of its workforce and push for corporate sponsorship of its bands under a "revolutionary" overhaul confirmed yesterday.

The firm's private equity owner, Terra Firma, said as many as 2,000 jobs will go in the next six months to help save £200 million a year and enable the label to meet the "challenges" of the digital age.

Other planned changes include beefing up and changing the roles of EMI's talent spotting network, nearly halving the marketing spend, and the elimination of "significant" duplications within the group.

The turnaround is aimed at the recorded music arm of EMI - whose artists include Coldplay, Robbie Williams and Lily Allen - and which has struggled with falling CD sales across the industry due to digital downloading and piracy.

The company made pretax losses of £263.6 million last year. Terra Firma, led by financier Guy Hands, took over the business last summer in a £3.2 billion deal. Mr Hands has outlined how he wants to see EMI's talent spotters - currently around six per cent of the recorded music arm's 4,400 staff - concentrate on scouting and maxim-ising artist potential.

A new unit called music services is being set up to maximise the artists' potential and co-ordinate how their music is sold and retailed.

Initiatives include helping performers and bands to "monetise their work" through sponsorship deals with firms, similar to those in the football industry, and linking up local bands with local businesses.

There were warnings that Mr Hands' plans risk offending the "artistic sensibilities" of big-selling acts such as Coldplay. Robbie Williams's manager has already accused him of acting like a "plantation manager", while the pop star himself has threatened to withhold new records until he gets assurances over marketing and distribution.

But Mr Hands said: "We have spent a long time looking intensely at EMI and the problems faced by its recorded music division which, like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment. We believe we have devised a new revolutionary structure for the group that will improve every area of the business."

Hermann Verseraaten, who works in artwork production for EMI, said: "Obviously, it's sad news, but we hope the new plans will work and we will come out stronger.

"Everybody is very worried about job losses, but we don't really know the details yet. Mr Verseraaten said there was a general realisation among EMI staff that things had to change for the company to move forward.

But John Webster, from the Music Managers Forum, branded aspects of Mr Hands' strategy for EMI as "naive".

He said: "Guy Hands is a business-man, but he has to understand that not all artists' primary motivation is making money."

On the prospect of corporate tie-ups for artists, he said: "People have tried this for years but it's always foundered on artistic sensibilities.

"It's not impossible - the Rolling Stones have always had their price but people have to consider that some bands aren't interested and fans could potentially be turned off something like that.

"At the end of the day, this business is all about relationships and the main relationship is between the band and its fans."