VU sheds 216 jobs in N.Y., Paris
October, 11 2002 - The Hollywood Reporter
Vivendi Universal on Thursday announced a major reorganization of its headquarters and corporate staff that will cut nearly half of the conglomerate’s Paris-based corporate work force and turn its New York operations into a regionally focused branch office.
The move will save Vivendi Uni about €140 million ($138 million) a year, the company said.
The Paris headquarters will see 152 of 327 jobs cut in the corporate division, which includes such functions as corporate and investor relations, human resources, information technology, corporate jet services and legal and tax services.
In the New York corporate offices, which now will deal almost exclusively with North American functions, Vivendi Uni will reduce its staff of 174 to 110 by December. There were 184 employees working in corporate functions, mainly housed in two locations, as of Aug. 31, and in March the company had reported 215 corporate employees in New York.
It was not immediately clear whether high-profile executives will be affected by the cuts because French labor laws prohibit companies from specifying which jobs will be cut for a week.
“The plan will be elaborated upon next week. We’re anticipating the next step in about eight days,” a Vivendi Uni spokesman said.
As part of the restructuring, Vivendi Uni will consolidate its New York staff at 800 Third Ave., a location the company said it had previously planned to sublease.
Vivendi Uni’s main New York office at the Seagram building will be vacated, and the conglomerate is looking for subleasers, given that it has contracted the space through 2005, sources said.
Similarly, small corporate staffs at Vivendi Uni’s Washington and Los Angeles locations will be assigned directly to specific business units of the conglomerate, sources said.
While some observers said Thursday that the changes mark a clear downgrade of Vivendi Uni’s New York corporate offices, one company source said they will have no effect on the importance of divisional staffs in the city.
It was unclear Thursday whether job cuts are planned at any divisions besides the corporate operations. A Vivendi Uni spokeswoman in New York said she was not aware of any such plans .
Overall, the staff restructuring is expected to save the company about €140 million ($138 million), or 46% of its €313 million ($308 million) yearly operating budget.
In its statement, Vivendi Uni also said “there will be a very significant cut in non-payroll costs” and cited external services as one area where these cuts will take place. The company did not say whether it will have to take a charge against earnings to account for severance packages. A spokeswoman said she could not comment.
Thursday’s announcement does not come as a surprise in view of Vivendi Uni head Jean-Rene Fourtou’s Sept. 25 media conference in Paris, at which he outlined a number of debt-cutting measures, including reductions in corporate overhead and real estate costs (HR 9/26).
The reorganization will not affect Vivendi Uni’s holdings.
Meanwhile, one source said Thursday that Vivendi Uni’s planned sale of its publishing unit could face further delays. A Tuesday deadline for bids could be pushed back by a week or so as bidding consortia continue to perform their due diligence, the source said. A Vivendi Uni spokeswoman declined comment.
Vivendi Uni shares closed up 5.7% at 11.75 in Paris trading. The company’s American depository shares rose 8.5% to 11.77.
Joe Ray reported from Paris; Georg Szalai reported from New York.
