UPI to Cut 150 Jobs in Plan to Halt Red Ink
United Press International announced a plan Wednesday to go from perennial money loser to profitability within two years by creating and expanding market-oriented news and information services and by cutting costs, including eliminating nearly 150 positions company-wide.
At a news conference held to outline the wire service’s rebuilding plan, UPI President Paul Steinle and Chairman Earl W. Brian stressed that UPI will remain a full-service, 24-hour-a-day, worldwide news agency.
The company, which is losing about $2 million a month, will focus on services that receive substantial client support, including state and regional news, while developing new products for media and non-media clients, especially in the area of financial news.
The business plan was written after two research firms interviewed more than 500 news media representatives.
“We found out what UPI is doing right; but, more importantly, we found out what UPI is doing wrong,” Steinle said.
Program Has Two Phases
The UPI turnaround program involves two phases: a three- to six-month period to stabilize the company and a second phase to move UPI into new and expanded lines of business. During the first phase, UPI expects to save $5 million through staff reduction and spend $5 million in deficit financing, Brian said.
A key to success, Steinle said, will be continuous monitoring of market use of UPI products and feedback from clients.
Brian said the business plan is feasible and can attract investors.
“I estimate approximately $15 million in permanent equity financing will be required by the time we have completed the second phase,” he said.
Steinle and Brian said it had not been clear until a few days ago whether a business plan could be worked out to save UPI from liquidation. When asked what factor made it possible to formulate a plan, Brian responded: “Financeability.”
He said investors, including some major media companies, have expressed interest in funding the UPI turnaround, and that Infotech will provide short-term bridge loans.
Steinle said fewer than 100 of the nearly 150 staff positions cut will be editorial, with many of the cuts accomplished by attrition. The number of full-time employees at UPI worldwide will be reduced by 14%, to 1,130.
