A & M Records Closes; Geffen Lays Off 110

After 37 years of spinning out hits by such acts as Cat Stevens, the Police and Sheryl Crow, A & M Records closed its doors Thursday--firing nearly 170 employees who were given the day to pack and leave.

Artists and executives hugged in the parking lot as weeping employees carried boxes of personal belongings to their cars. Above them, the A & M sign was draped with a black band and the flag flew at half staff, to commemorate, fired workers said, the death of the historic Hollywood record label.

Those fired at A & M were among nearly 500 employees cut in Los Angeles and New York by Seagram Co. as part of a massive restructuring that will eliminate thousands of music industry jobs worldwide. Two miles down the road, Geffen Record employees stripped the walls of gold records and carried boxes down Sunset Boulevard past the label’s headquarters after being notified that they too no longer had jobs. About 110 Geffen employees were fired.

Signaling an end to an era in the Los Angeles music scene, the layoffs underscore the changing economics and direction of the music business as Seagram, which recently completed its $10.4-billion acquisition of PolyGram, combines two of the world’s biggest record conglomerates.

At their peaks, A & M and Geffen represented the commercial and artistic potential of independent labels, which have been the proving ground for scores of musicians whose talents and vision did not fit into more mainstream labels.

But both labels began losing autonomy after they were bought up during the last decade by conglomerates PolyGram and MCA.

Changes Alarm Some Critics

Some industry critics are alarmed at the changes. With power concentrated in fewer and fewer hands, the danger, they fear, is that there will be no room left for the independent spirit that helped build such legendary independent labels as Atlantic, Motown, Island, A & M and Geffen. Among the artists launched by A & M and Geffen alone: Cat Stevens, the Police, Nirvana, the Carpenters, Joe Cocker, Beck and Guns ‘N Roses.

“This isn’t about Universal or Seagram,” said A & M chief Al Cafaro, who also was fired. “The record business is changing fundamentally. Don’t think that there are calm seas on the other side of this threshold. If the quake that devoured A & M and Geffen is a 6.0 on the Richter scale, there is a 7.0 coming in this industry. It’s a Wall Street world now. Get ready.”

Sources say Seagram is considering selling the A & M lot--which houses film star Charlie Chaplin’s former sound stage--and the Geffen Records’ headquarters--a converted group of houses once owned by songwriter Hoagy Carmichael.

Executives at Seagram’s Universal Music Group say that A & M and Geffen will be folded into Interscope Records to form IGA--one of four large music groups made up of consolidated labels acquired in Seagram’s purchase of PolyGram. About 200 employees were laid off Thursday at the New York-based Motown, Mercury and Island labels. About 250 artists will also be dropped over the next few months, sources said.

Universal executives say they intend to preserve the individual identities of the downsized labels as they fold them into larger groups, but the handful of A & M and Geffen employees who survived the blood bath were skeptical.

A & M, Geffen, Motown, Mercury and Island all have performed poorly in recent years, producing few hits and often operating in the red. Some label employees kept on by Seagram privately acknowledged that the downsizing was merited. Several workers who lost their jobs even praised Seagram’s handling of the layoffs, saying the company had offered them generous severance packages.

“While change is always difficult, the restructuring of the labels is necessary for us to be more competitive, develop artists’ careers and pave the way for meaningful growth,” Universal Music Group said in a statement.

Seagram expects to produce $300 million in savings annually by consolidating the companies. Analysts suggest that the restructuring will provide Universal with unparalleled economies of scale guaranteed to boost operating margins and position the conglomerate for strong earnings growth over the next three years.

But that’s little consolation to record label employees who were issued pink slips Thursday morning.

At A & M, employees wore baseball caps embroidered with the slogan “The Last of the Lot” as they gathered for a 9:30 a.m. meeting inside the Charlie Chaplin sound stage to hear the news. Sheryl Crow and Soundgarden’s Chris Cornell stopped by the lot to trade war stories with tearful employees in the afternoon. Before the day was over, Universal officials ordered A & M to remove the black band that employees had draped around the company’s famed trumpet overlooking the label’s La Brea Avenue entrance.

While A & M and Geffen will live on in name, the gutting of their enterprises effectively ends their history as independent upstarts.

A & M started modestly, with trumpeter Herb Alpert and his business partner Jerry Moss pooling their money and initials to create a record company. “The Lonely Bull,” by Alpert and the Tijuana Brass, was a huge first hit for the nascent label in 1962, and the co-founder would remain the label’s star until Carole King, Joe Cocker, Burt Bacharach, Cat Stevens and the Carpenters were added in the late ‘60s or early ‘70s.

The company turned to arena rockers--Styx, Peter Frampton, Supertramp--as the ‘70s wore on, and found its flagship act for the 1980s in a British trio called the Police. Janet Jackson became a huge A & M star before Alpert and Moss decided to sell the company to PolyGram for about $500 million in 1989. Alpert and Moss quit the label after a series of disputes with corporate management at PolyGram.

“It’s certainly sad to see what is happening today, but to tell you the truth, you could see it coming once A & M became part of the [conglomerate structure] at Polygram,” Alpert said Thursday. “I saw that train coming . . . the sharp contrast between the independent world and that corporate. I don’t think their bottom line has much to do with music or artists. It’s very black and white.

“I’m not speaking for all corporations, just my experience at PolyGram. It seemed like they were so bottom-line conscious that it was hard to make a decision like we used to . . . just from the gut, based on feeling, not whether an artist might be able to sell oodles of records.”

Roster of Big Names

Where A & M started small, Geffen Records landed with a splash in 1980 as its founder, David Geffen, returned to the music industry after an eight-year hiatus to sign John Lennon, Elton John and Donna Summer to his new namesake label.

Geffen picked up where he left off with the 1972 sale of his Asylum Records, a label that boasted Jackson Browne, the Eagles and Linda Ronstadt. But Lennon’s murder rattled the company badly, and a slump followed.

Geffen eventually found hit-makers in Aerosmith and Cher, acts viewed as retreads by others in the industry, and huge new super bands Guns ‘N Roses and Nirvana. The roster also included veterans Don Henley and Peter Gabriel, who hit their solo strides in the 1980s, and quick-hit money-makers such as Whitesnake.

Geffen employees were told about their fate in a pair of 45-minute morning meetings in the conference room of the Geffen Records building, at the west edge of the Sunset Strip. Later in the day, several dozen employees, including fired Chairman Eddie Rosenblatt, gathered across the street at the Rainbow Room for what they called a “wake.”

“It’s very sad for me,” said David Geffen, who sold the label to MCA in 1990 and now is a principal in DreamWorks SKG. “The thing that made Geffen and A & M and Interscope appealing and successful was the fact that they were small, agile and were able to react quickly. That gave an artist a certain kind of involvement and attention compared to what the big record companies could provide. Now Geffen and A & M and Interscope are one big company. It’s a painful thing to watch.”