Popular acts including Beck, Sheryl Crow, Sting, and more, have suddenly found themselves without labels or record contracts, sending the industry reeling

Along with white-boy rappers and Latin sensations, there’s a new type of artist making the scene: the musically homeless. In their ranks you’ll find cult faves (Morrissey), faded pop stars (Paula Abdul), and the neo-country elite (Cowboy Junkies) — all of whom have lost their record deals.

Seven months after the sale of PolyGram to Seagram’s Universal for $10.4 billion, the biggest merger in music history hasn’t just created the world’s largest record company (the Universal Music Group), it’s thrust some major names — including Sting, Hole, and Sheryl Crow — into a dizzying game of musical chairs.

Though the dust is still settling, PolyGram, whose holdings included Island, Mercury, and Def Jam, has been melded with the UMG properties MCA, Geffen, and Interscope. This new mega-company now consists of two primary divisions: the Los Angeles-based Interscope Geffen A&M Records, home to acts like No Doubt and Garbage; and Island Def Jam, headquartered in New York and boasting talents like Method Man and Hanson.

To illustrate the mind-blowing jumble that is now UMG, consider the following: Satan-worshiping Marilyn Manson (an Interscope act) is label mates with God-loving Amy Grant (an A&M artist). And all that was sacrificed in the creation of this unholy alliance were the jobs of some 1,200 rank-and-file employees (so far!) and a few high-powered gurus like Mercury president Danny Goldberg and A&M chief Al Cafaro.

But while fired staffers receive severance and unemployment and execs have their golden parachutes, dropped acts are getting nothing but a boot print. According to a Universal spokesman, 187 groups — characterized mostly as baby bands and other unfamiliar combos — have been cut from the rosters of Island and Def Jam alone. Walking papers have also been issued to hipsters like the Geffen-based Boss Hog and Polydor’s R.E.M.-flavored Buffalo Tom. ”They didn’t do a mass drop,” says Scott Ambrose Reilly, manager of God Street Wine, a jam-happy Deadhead-inspired band now in limbo with Mercury. ”That way, they didn’t have a bloodbath in the press.” Adds one major rock star now with UMG: ”There are bands that don’t even know if they’re dropped yet because nobody will call and tell them.”

Among the most publicized dropees has been ex-‘Til Tuesday singer Aimee Mann, who’s become the martyred poster child for axed artists. Last January, the critically admired Geffen singer played her third solo album to her new bosses. (The record includes tracks that may be featured in Paul Thomas Anderson’s December movie, Magnolia.) ”At first they told us they liked [it],” says Mann’s manager, Michael Hausman. ”But later we found out they didn’t like it so much. I met with Jimmy [Iovine, former Interscope cohead-turned-Interscope Geffen A&M cochair], and he was like, ‘You’ll have to excuse me, it’s so crazy here — we’re merging bathrooms.’ I’ve got an artist who spent two years making a record, and this guy’s telling me about bathrooms.” In early May, Mann received official word she’d been let go. Adding insult to penury, to take her unreleased record elsewhere, she must first buy back the master tapes from UMG, which could run into several hundred thousand dollars. (UMG would not comment on the status of these negotiations.)