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Wednesday, December 9, 1998 Published at 16:14 GMT


Business: The Company File

Seagram jobs shake-up?

Universal Studios has been going through turbulent times

The Canadian drinks and entertainment group Seagram is reported to be on the verge of a huge reorganisation which could lead to thousands of job cuts after it takes control of music firm Polygram on Thursday.

Seagram is buying PolyGram in a $10.2bn deal, which will create the biggest music company in the world.

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[ image: Seagram has had trouble finding a buyer for Polygram Filmed Entertainment]
Seagram has had trouble finding a buyer for Polygram Filmed Entertainment
It completed its tender offer for the company's shares on Sunday, and the New York Stock Exchange suspended trading of PolyGram shares on Monday.

A Seagram spokesman said "completion of the acquisition process would begin on Thursday with the exchange of cash and shares".

Press reports said the restructuring was likely to include thousands of layoffs as well as the closure of some well-known music labels as part of a plan to shave $300m in annual costs for the combined company.

Labels such as Motown, Geffen, A&M and Mercury are expected to undergo major downsizing.

The reports said the restructuring could lead to the loss of about 20% of Universal's and PolyGram's combined work force of 15,500. Around 3,000 employees could be affected.

Corporate turmoil

Industry analysts have also speculated that Seagram could merge the film production and distribution assets of PolyGram Filmed Entertainment into its existing Universal Studios.

Seagram chief executive Edgar Bronfman Jr had hoped to sell all of PolyGram for about $1bn but only succeeded in selling the movie library to MGM for $250m, including titles like "The Graduate" and "When Harry Met Sally".

Carlton Communications is said to be close to buying the remaining television portion of the library for about $100m.

Seagram Chairman Edgar Bronfman Sr meanwhile has said he is confident the Universal Studios arm of his company will start churning out hits in 1999.

It would end a year of corporate turmoil and box-office flops at the entertainment group headed by his son, Edgar Bronfman Jr.

Last week Universal Pictures chief Casey Silver got the axe, two weeks after the ousting of Universal Studios Chairman Frank Biondi.

Mr Bronfman Sr said: "The fact of the matter is that most of the areas have turned around and are doing very well.

"The one area where we are having some problems is the production of movies - we have had a lot of not great successes. ... I hope that the corner will turn on that."





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