Facing The Music At Universal Facing The Music At Universal / Long List Of Executives Let Go In Industry's Biggest Restructuring

The biggest corporate restructuring in the history of the music industry officially began Wednesday and will continue today, with Seagram's Universal Music Group firing nearly 500 employees in the United States and letting 250 artists go.

Universal Music Group, now the world's largest music company since acquiring PolyGram for $10.4 billion last month, is not expected to complete the entire restructuring -- involving a potential 3,000 pink slips in total -- until at least July. Under Seagram Co. president and CEO Edgar Bronfman Jr.'s mandate, Universal Music chiefs were told to produce a $300 million savings annually by eliminating redundancies.

Sources said contractual executives at Mercury and Island on the East Coast were let go Wednesday and more than 100 employees from both companies will be let go by the end of today.

Among Mercury's top personnel, sources said general manager and executive vp David Leach will be one of the few executives likely to stay on. Steve Greenberg, head of A&R, will also stay on board. Mercury Group chairman Danny Goldberg has already left.

Leach is expected to take on the role of senior vp promotion for the Mercury-Island-Def Jam Group, UMG's new New York-based unit formed by the combination of the three former PolyGram labels. That unit is being run by Jim Caparro and John Reid, and is expected to be filled out by 15-20 former PolyGram Distribution Group executives who worked with Caparro, the former head of the distribution company.

Sources said Mercury department heads who have exited include veteran Jeff Brody (senior vp sales), Marty Maidenberg (senior vp marketing and artist development), Annette Mitchell (vp video production), Dave Lory (vp international), Michael Krumper (senior vp marketing) and 25-year veteran Bas Hartong, a senior vp. Others who have been let go include Mike Maska (vp marketing), David Silver (vp A&R) and Alison Hamamura, senior vp and general manager West Coast.

Meanwhile at Island, senior vp promotions Joe Riccitelli has left, as has Andrew Lewis, the head of business affairs. Marketing head Daniel Savage has been asked to remain on in an interim basis.

Johnny Barbis, president of Island Records, will remain on in an unspecified role, sources said, while Island chairman Davitt Sigerson has already stepped down. The fate of Hiram Hicks, Island's president of black music, is still unresolved, sources said.

The third label in the group, Def Jam, will remain unscathed as Universal only owns 60% of the company. While UMG is looking into purchasing the remaining 40%, sources said founder Russell Simmons needs to lower the label's asking price before such a deal could be made.