'UPI Hopes to Get More with Less'



Here's a story by George Garneau from the April 9, 1988, edition of Editor & Publisher:

New Business Plan Announced

United Press International -- hoping to get more with less -- will eliminate 150 jobs and cut $10 million in administrative costs while boosting productivity, according to its new managers.

The changes were announced March 30 at a press conference to unveil "UPI 2000," the plan to turn the perennially money-losing news service to profitability by July 1989.

The first phase of the plan calls for stabilizing UPI within 60 days, halting its revenue slide this year at the $66 million mark, from nearly $90 million in 1985. The second phase includes long-term financing and moving into areas of growth, including joint ventures and trying to sell services to non media clients.

The turnaround will cost $15 million as proposed by WNW Group Inc., which took over UPI in February under a proxy agreement with majority owner Mario Vazquez Rana, the Mexican publisher whose stewardship was marked by instability and growing losses.

The plan aims to plug annual losses running over $20 million by saving $10 million in "administrative" costs, $5 million in staff cuts and pumping $5 million into the company from WNW, its parent company Infotechnology Inc. and other sources.

Reports on UPI's plans were based on a 700-page business plan that took into account "extensive" market research and will be used to raise financing.

The work force reductions represent a cut of 14 percent from current staffing, which will drop to 1,130, said WNW chairman Dr. Earl Brian and president Paul Steinle.

While less severe than some earlier proposals, the reductions, combined with over 100 earlier layoffs and about 100 resignations, will leave UPI with at least 350 fewer employees than it had in November, according to the Wire Service Guild. The plan essentially maintains UPI as a full-time, full-service international newswire, though significantly smaller than it was four months ago.

Highlights of the plan also include:

** Streamline UPI's "patchwork" communications systems. Price: $2 million to $3 million.

** Set up joint ventures to reach new markets with new products.

For example, DBC SuperNews, a service created by Infotech affiliates Financial News Network and Data Broadcasting Corp. to deliver information from UPI to personal computers via cable television lines.

** UPI will be "unbundled" within a year. Services will be offered separately, with a new pricing structure, no details of which were released.

** Establish a digital photo transmission service this year, though not necessarily the Pyxys system announced under Vazquez.

** Develop a new "universal" writing style emphasizing short, declarative sentences and clarity. Make UPI mean "usefully packaged information."

** More emphasis on regional reporting and business news.

Fewer than 100 editorial jobs will be affected, the executives said, pledging "concentration" on state and regional reporting, increased emphasis on business reports and "no significant change" in the 180 bureaus and 5,000 stringers worldwide. Administrative staff proportionally will be hit hardest by layoffs.

UPI will "remain competitive" with the Associated Press, Steinle said, but in specific areas, including key Washington beats.

"UPI will cover most events," Brian said. "We are going to increase the amount of coverage going on here (Washington, D.C.)."

Managers did not explain with specificity how productivity could increase with hundreds fewer employees, except to say that staffing did not relate directly to coverage and that technology would boost productivity.

Some editing jobs will be made "redundant" by a computer system allowing editors -- in one operation -- to prepare copy for newspapers, television and radio using transparent codes.

More efficient editing will free staff for reporting, executive editor Al Rossister Jr. declared.

Another cost saving move will shift translating now done at the Latin American desk in Washington to somewhere in that region.

Steinle said the news business wants stories written more analytically and in a "more useful and compelling way."

Instead of delivering hundreds of stories a day, only to have a newspaper use 50, he said UPI would aim to produce the 50 stories newspapers want.

He said plans include "strengthening" state and regional reporting, and bolstering "the kind of technical reporting that is so important in understanding the modern world but that most local news media are not staffed to do effectively."

He specified business, analysis, health, science, law and medicine.

A new "universal writing style" for print and broadcast media will emphasize "clarity and compact presentation," but will not be a wire version of USA Today.

The style will employ "short, direct declaratory sentences," according to UPI national editor Bill Ferguson, and will give newspapers "more readability."

Classic wire service style -- inverted pyramid with the "five w's" in the lead -- may be due for some revision, Ferguson suggested.

"You're going to see more clarity in UPI. You're going to see less of the archaic," Ferguson stated.

Brian said the decision to reorganize rather than liquidate UPI was based on the "financiability" of the plan. He said a number of resources, including several media companies he declined to name, had expressed interest in staking UPI, which has 2,500 clients.

He said WNW and Infotech expected to invest $3 million in bridge financing with another $2 million needed over 12 months until long-term financing through sale of stock.

Wire Service Guild negotiator Sean McCormally said the union, which has been seeking a contract to replace management-imposed work rules, was "not seeking anything in the negotiations that costs UPI money beyond what has already been offered or anything that would bar it from reorganizing to take advantage of new markets."

Regretting 150 lost jobs, the union said it was pleased no further reductions were planned for a year or two.

"We have already seen 115 people fired and more than 100 resign since November," McCormally noted in a statement. "That means nearly 400 people who devoted their talents and energies to helping keep UPI afloat through these trying past few years have been lost, and UPI is poorer for that loss."

Staff reductions will come through layoffs, buyouts, transfers and/or retraining as UPI pledged to minimize their impact.

Brian said UPI would use joint ventures with Infotech subsidiaries and other companies to cut costs.

SuperNews, he said, would "dramatically" reduce the cost of delivering cable-wired homes with computers and would be available within 90 days. Another new service will begin delivering regional business reports within 60 days, he reported.

UPI also announced an agreement with States News Service to carry States' reports to UPI broadcast clients.

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