MGM to Cut Work Force, Shelve Film Projects

Metro-Goldwyn-Mayer Inc. will take second-quarter charges of $225 million to cut 5% of its work force and shelve some film projects.

The charges, about $140 million of which relate to the company’s film business, will result in a loss of $250 million, or $1.66 a share, for the quarter.

The company will cut 45 of its 879 employees worldwide.

The moves come two months after Kirk Kerkorian, the majority investor, installed new top management at the company, which hasn’t turned a profit in more than a decade.

MGM said it will write off some films that are in development or haven’t been released as Chairman Alex Yemenidjian and Vice Chairman Chris McGurk look for ways to widen the reach of the company’s titles on television and the Internet.

“We can now focus on . . . capitalizing on the demand for our massive, modern film library as we regain full control of this asset and as new technologies develop,” McGurk said.

MGM owns one of the world’s largest film libraries, with more than 5,000 titles, including the James Bond series, “The Wizard of Oz” and “The Graduate.”

The restructuring is expected to save MGM more than $11 million a year.

The company said it plans to expand its satellite, cable TV and Internet businesses, though it didn’t provide details of those plans. Executives have said one option is to forge a partnership with a cable programming company on a new MGM-branded channel.

MGM, which is headquartered in Santa Monica, announced it will focus its TV production business on first-run syndication, meaning it will limit itself to producing shows for sale to individual stations rather than to the major networks.

As part of that move, MGM said John Symes, its president of worldwide television, has resigned.

MGM has reduced the number of shows in production to four this year from eight in 1998.

Even though 17 of the 45 jobs being cut are in the TV business, “we are committed to TV as a viable opportunity, and we have a healthy infrastructure in place,” said Craig Parsons, a company spokesman.

MGM has announced several other changes since Kerkorian brought in Yemenidjian and McGurk in April.

On Monday, the company said that Fox Entertainment Group Inc. will take over the overseas distribution of MGM movies in theaters and on video and DVD next year.

As part of that initiative, MGM will withdraw from United International Pictures, a venture with Viacom Inc.’s Paramount and Seagram Co.’s Universal that handles international distribution of films in theaters.

MGM shares fell 75 cents to close at $15.50 on the New York Stock Exchange.