NEW YORK — United Artists Theatre Circuit laid off 50-75 administrative staffers and officers at its Den-ver head office Tuesday as part of a restructuring aimed at cutting its overhead costs up to 20%.
The shakeup, which highlights an effort by the financially struggling UATC to better focus its business, is aimed at saving 20% of UATC’s $32 million in annual overhead, or about $6 million. One of the people to go is UATC’ s marketing exec Bill Quigley, sources said.
Coming just a month after UATC’ s longtime CEO Stewart Blair quit, the cost-cutting indicates that the exhibitor is moving aggressively to revamp its way of doing business. UATC’s board has hired a headhunter to replace Blair, but UATC CFO Kurt Hall said the company was not waiting for Blair’s replacement to act.
Hall said UATC needed to “structure ourselves more efficiently.” He added that the key to the exhibitor’s “future success is to keep our business plan simple and to focus on two overall goals: increasing our operating cash flow and net earnings and reducing our debt. This corporate restructuring is the first step in achieving those goals.”
UATC generated cash flow of $54 million in 1995 but reported a net loss of $87.2 million (it has to release figures for 1996). Burdened by $400 million in debt and an aging circuit, UATC has been struggling to compete against fast-growing rivals like AMC Entertainment and Regal Cinemas. The company is periodically afflicted by rumors that it is up for sale, although it issued an unusual statement last month denying one published report that it was on the auction block.
Hall said several administrative functions will be consolidated in the restructuring, including purchasing, marketing and some sales functions. Until now businesses like the Proteus Network theater rental group, in-theater advertising and VIP ticket sales had their own sales operations so now one sales force will handle all three.
The focus will be “How do we best serve the theaters?” Hall said.