'UPI Reorganizes Again'

Here's a story by Andrew Radolf from the Nov. 28, 1987 edition of Editor & Publisher:


Just one year after United Press International split itself into 21 decentralized regions "for improved service," the news service has decided to reorganize itself back into six larger divisions.

In the process, UPI terminated eight sales executives by sending them overnight letters via Purolator which essentially told them not to report to work anymore.

Five of those let go were women, including one female sales manager who in August had filed a sex discrimination complaint against UPI with the Equal Employment Opportunity Commission.

One of the men who was terminated was subsequently rehired, after the news service learned the man was seriously ill, according to UPI officials.

Several of the terminated women said UPI informed them that they had to sign an agreement not to sue the company for any reason, including discrimination, before they would receive any severance payments.

In October 1986, UPI restructured its five domestic divisions into 21 editorial and marketing regions. UPI owner Mario Vazquez Rana said at the time that the decentralized setup would foster better contacts with UPI's clients.

One year later, UPI senior vice president Charles Hollingsworth announced that "in an extensive modernization" of UPI's marketing and sales organization, United Press International will incorporate its current 21 management regions into six new regional divisions.

UPI executive vice president Claude Hippeau said that Vazquez had been informed of Hollingsworth's reorganization plan and gave his approval.

The six new division managers will report to T. Swift Lockard, who was named to the new position of manager/national sales.

UPI spokesman Chris Smith said the latest reorganization was "purely marketing. The other (divisions) had been administrative."

Smith said the 21 regions "will continue to exist, but as part of the six divisions. It's like counties within states."

The marketing reorganization created "redundancies" in the deployment of sales managers, Smith said. There were a total of 20 jobs eliminated in the reorganization, but except for seven that were let go, the other people were reassigned, Smith said.

"Through the course of this reorganization, every effort was made to find other positions for people where we could do that," Smith said. Regarding the seven who were terminated, "the decision had been made that there was no way those people could be kept on," he said.

The termination letters, dated Oct. 15, were went out under Hollingsworth's signature.

"It is with sad regret that I must inform you of your termination from United Press International effective Oct. 30, the letter began.

Citing the reorganization plan, it continued: "One of the many impacts of that reorganization is a diminishing role for your position. You will receive a letter from the human resources department outlining the settlement procedure with the company."

The letter also told the terminated employees that it was "not necessary for you to report to work through Oct. 30, 1987. However, we will appreciate your cooperation in an orderly transition."

Several of those terminated said UPI never offered any transfers to other posts, either before or after sending Hollingsworth's letter.

However, one woman who was let go reportedly had been offered a transfer a couple of months earlier, but she had declined. Another woman said that after she received her termination letter, UPI officials told her that if she were willing to move at her own expense, she could re-apply for employment with UPI at another location.

"UPI has offered severance, but you have to sign quit claims (agreements) and covenants not to sue," said one terminated employee.

Another said UPI wanted the terminated employees to agree they would "not participate in any EEOC class action."

One of the women terminated was Mary Van Meter, former regional sales manager in Denver.

Van Meter told E&P that she filed a retaliation claim with the EEOC after receiving her letter from Hollingsworth.

She also said that UPI recently revised its commission structure, retroactive to July, in a way that would preclude salespeople from receiving large commissions for resigning clients which had previously canceled the news service.

"They're not paying out the big money," she said. "They keep changing the rules."

UPI spokesman Smith said Van Meter's suit is "without merit."

Hippeau stated that the decision to terminate Van Meter "had nothing to do with the fact (she) was suing us. We figured these were not the type of sales executives we needed at this time."

In addition to the eight terminated employees, three other sales and marketing people were transferred to editorial positions. Judy Watson, who had been regional manager for New York, became New York regional editor. Gordon Sakamoto in Hawaii and Jeff Berliner in Alaska also returned to editorial posts.

Several other sales and business executives have also either left UPI or are planning to leave.

Jessica Hughes, a regional sales executive in Philadelphia who has filed a race discrimination claim against the company, has submitted her resignation and will leave UPI shortly.

Dean Wheeler, who in the October 1986 reorganization was named a deputy to general operations manger William Morrisey, recently left UPI to become a sales executive in Washington with Reuters.

Other executives who left UPI in recent months include Gordon Rice, who had been named general sales manager in October 1986, and Bruce Kanner, who a year ago had been named regional manager for California and Nevada but left the company because he wanted to remain in Washington.

under the latest reorganization plan, the six new division managers are: Marge Boatwright, Southwest; Ernest J. Hutchinson, West; John Kady, Central; John Morgan, Northeast; Allan Siegert, Southeast; and I.J. "Pinky" Vidacovich, Mid Atlantic.

Peter Zollman was named manager/special projects. Victoria Wakefield was named manager/corporate and government sales and Jack Graeme was named manager/newspaper group sales.