Dr. Luke will reportedly be dropped by Sony Music.
The record company are said to be considering terminating the contract of the 42-year-old music producer - real name Lukasz Sebastian Gottwald - as public pressure mounts following allegations he has sexually assaulted Kesha.
A source said: "There is no contest. Kesha has no case in regards to her contract but they can't afford the Adeles of the world out in the streets calling the label unsupportive.
"The fact that this hasn't already been taken care of with Luke is confusing, especially for people in the building."
However, a representative for Dr. Luke has denied the claims, insisting it has "never come up" in conversations with Sony executives.
They told TheWrap: "This is not true. Luke has an excellent relationship with Sony. His representatives are in regular contact with executives at the highest levels at Sony and this has never come up."
Meanwhile, Luke has been hit by further negative accusations recently, when Kelly Clarkson claimed he is "difficult to work with".
She said: "I'll be honest about the guy, but I don't know that situation. He's not a good person, to me. We've clashed. He's difficult to work with, he's kind of demeaning.
"Obviously he's a talented dude but he's lied a lot. Musically it's been really hard for me because he will just lie to people and it makes the artist look bad."