About 1,000 D.C. Employees Could Be Cut, Workers Say

Proposed staff cuts at the American Red Cross would fall almost entirely on the group's Washington workforce, said officials at the disaster-relief charity, who are expecting headquarters reductions to help close a $200 million budget gap and hone the organization's work at chapters across the country.

"As we looked at that deficit, one of the major factors that became clear was how much growth there has been at headquarters over the years," said Suzy DeFrancis, chief public affairs officer for the Red Cross. "This will allow us to refocus our efforts on the field."

A large portion of the organization's $3.45 billion budget is represented by salaries at the headquarters, DeFrancis said, with about 3,000 of the Red Cross's 33,000 employees based there. Several headquarters staff members, who spoke on the condition of anonymity because the plan is not final, said they think as much as a third of the Washington workforce would be let go. Some workers have been told to expect a pink slip, one former employee said.

DeFrancis said that the size of the cuts and the specific positions have not been determined but that senior managers will present a proposal to the organization's board of directors this weekend and announce a final arrangement by the end of next month.

"The majority of reductions will be pretty much across-the-board," DeFrancis said. "All the headquarters' functions will be under review; everyone will have to reduce their operations in some form."

Workers in the headquarters, a compound of historic white buildings just blocks from the White House, were told in October that a significant reorganization was likely, DeFrancis said. And acting Red Cross President Mary Elcano, addressing all staff members at a holiday gathering, said the board would be working on a layoff plan over the first months of the year.

"We've known something like this was coming for a while," said one of the headquarters employees who spoke on the condition of anonymity. "It wasn't like a complete surprise."

The workers described the mood in the headquarters as somber and nervous. "There's a lot of hand-wringing," one said. "Most people have worked here for a long time."

DeFrancis said the Red Cross has no final details about separation packages that could be offered.

The Red Cross, founded in 1881, has suffered fundraising shortfalls in recent years, particularly since it began allowing donors to earmark where they want their dollars spent. The organization made that change after it was criticized for using some of the donations made after Hurricane Katrina on general overhead expenses and other disaster-relief programs. With no high-profile natural disasters in recent years, the group's budget gap has grown.

"What this says is fundraising is not keeping up with the overhead and the cost of the facilities at the Red Cross," said one former executive, who spoke on the condition of anonymity. "It's as simple as that."

The Red Cross has also been buffeted by a dizzying turnover in presidents, most recently in November, when Mark W. Everson was forced to leave after six months upon revelations that he had had an inappropriate relationship with a female subordinate.

The board is searching for a replacement, but the group would give no timeline for when a new president would be named.

"One misstep after another has added up to a substantial decline in confidence in the Red Cross," said Paul Light, an expert in nonprofit organizations at New York University's Robert F. Wagner Graduate School of Public Service. "The board needs to move quickly to find a new president with the stature to reassure donors."

Staff writer Philip Rucker contributed to this report.