'UPI Shakes Up Sales Staff'

Here's a story by George Garneau from the Nov. 11, 1989 edition of Editor & Publisher:


United Press International has shaken up its sales department, laying off or forcing out senior staffers with pay cuts in favor of a larger, all-commission sales force.

Several sales representatives, mainly in broadcast, were laid off during the last week in October, staffers said. Meanwhile, on a retreat in Charlottesville, Va., that weekend, UPI senior vice president for sales Patrick Grotto informed about two dozen sales staffers that their terms of employment were changing: Instead of paying $40,000 to $60,000 a year salaries plus commission, UPI would pay commissions only.

"Essentially it appears they want a complete turnover in the sales force," said one longtime sales hand who was dismissed.

UPI spokesman Milt Capps, calling that "absurd," said some jobs were eliminated but "a strong core" has been retained in sales, especially in newspapers and broadcast. He said some jobs were cut, and some salespeople left rather than take pay cuts.

"This is about refocusing our effort in a way consistent with . . . our new product-line orientation," Capps said.

Plans called for a larger and better organized sales force of nearly 120 people, he said. Most new staff would be selling information services to businesses, associations and government.

Sales representatives will be "product specialists" organized by their target markets -- newspapers, radio, television, information services -- and will operate out of regional offices in New York, Chicago, Dallas, Los Angeles and Washington.

Eliminating salaries for more than 30 sales staffers, who may draw against commissions, would save at least $1.5 million a year in salaries alone.

UPI is projecting a small profit late this year. New owners are struggling to reverse years of losses, a worst $24 million a year.

The company previously shifted some salespeople into a new unit devoted to servicing clients, a function formerly performed in sales.

Plans involve "a major investment" in sales, including a full-time trainer, Capps said. "We feel we'll have a strong return in sales. The net is going to be a gain," he said.

The commission plan was "a pretty frightful prospect for somebody who knows how difficult it is to sell UPI," said one former salesman, who compared the job to selling snowballs in Alaska.

While it is important to have knowledgeable, experienced people, he said, "it was fairly obvious that what we were doing wasn't working."

Capps said two longtime UPI sales hands were in the process of being promoted to sales vice presidencies, John Kady in newspapers and David Haymore in radio.

Plans include more telemarketing, according to staffers and UPI.

Peter M. Zollman, who was laid off as sales director for the South, said, "I've had 14 years on a very rough roller coaster and it's been a really great experience. For the sake of all the people at UPI and for the institution itself, I hope the new management team is able to make this new plan work . . . I wish them all the best."