Ananova:

Stereolab have been dropped by the Warner Music Group in a major reorganisation by the record giant.

According to Rolling Stone nearly half of Warner Music Group's 170 artists may be dumped by the company while those who survive including the Darkness will probably have to work with smaller budgets in the future.

Martin Pike, manager of the London-based electronic-pop band told the magazine, "We were told that our services are going to be dispensed with.

"We've been with Elektra since 1993. That company doesn't exist anymore."

WMG head Lyor Cohen said, "Artists deserve a deep commitment from their labels.

"If that commitment doesn't exist, they should be given the freedom to pursue it elsewhere. The goal is to nurture artistic creativity and create successful careers."

In March, more than 1,000 employees were made redundant from the Warner Music Group.

The reorganisation followed the buy-out of the Warner Bros label from Time Warner for $2.6 million (£1.4 million) in February by a group of private investors including former Universal Music Group tycoon Edgar

Bronfman Jr.

Stereolab sold just 40,000 copies in the US of their recent album Margerine Eclipse and a planned show in New York on their last tour had to be cancelled because of poor ticket sales.

Other acts said to be under threat from the cutbacks are the US indie bands Breeders and Third Eye Blind although no official announcement has yet been made.