United Press International is asking the union representing its reporters and photographers to accept pay cuts of up to 40 percent and make other concessions in an effort to keep the financially troubled news organization afloat, according to UPI sources and a memo sent to employees yesterday.
As part of its belt-tightening efforts, UPI managers also will see their pay reduced by 35 percent beginning Sunday and lasting for at least 90 days, Pieter VanBennekom, executive vice president, said in the memo.
A UPI spokesman acknowledged that UPI also is considering asking the newspapers and broadcasters around the country that buy its news wire to accept a rate increase to help the company survive.
"All these drastic measures are necessary ... to stabilize the company during the next few months to be able to effect a sale of UPI in the shortest possible order," VanBennekom said in the memo.
"In previous years, UPI employees have been counted on for loyalty and willingness to sacrifice. I don't know if that willingness is still there," said Paul Walsh, a UPI sportswriter.
The measures are just the latest of many cost-cutting efforts at UPI in recent months. In August, UPI laid off 31 editorial employees and closed five news bureaus around the country. At the time, UPI celebrated the fact that it was the first news organization to transmit pictures of U.S. troops arriving in Saudi Arabia. But this week, budget cuts were so severe that the company wouldn't pay for the UPI photographer who covers the White House to accompany the president on a trip to Florida. Other UPI photographers pooled money from their own pockets so that the photographer could go.
UPI has an estimated 300 union employees and 600 nonunion employees, although precise numbers are difficult to determine because the company does not disclose job figures.
UPI is owned by Infotechnology Inc. of New York, which last week announced that it does not have enough cash to meet its daily operating expenses and will be forced to sell some or all of its assets. In addition to UPI, Infotechnology owns 47 percent of Financial News Network as well as shares in several other information and biotechnology companies.
In the memo yesterday, VanBennekom said UPI has had six preliminary purchase inquiries. Staff writer Paul Farhi contributed to this report.