Diana Swann remembers the moment well. On Sept. 7, in the midst of the sweeping staff reorganization at the American Red Cross national headquarters here, she was called into the personnel office.
A coworker had just been offered a new job in the pared-down Red Cross, Swann recalled, "so I felt a surge of hope. I thought I had a job opportunity and instead I got a farewell letter."
After nearly 13 years of working at the Red Cross, where she helped manage insurance programs for the group's employes and retirees, Swann had been handed her pink slip and told to clean out her desk. The organization no longer needed her services, not even the small artificial Christmas tree she bought with money left over from the office coffee fund.
Swann is one of 197 workers at Red Cross' national headquarters, with offices in the District, Alexandria and Bethesda, who have been "involuntarily terminated," in the words of the organization. The firings were ordered as part of large-scale staff shuffling and reorganization instigated by Richard F. Schubert, the affable, hard-charging former president of Bethlehem Steel Corp., who took over as Red Cross president in January 1983.
Under the reorganization, the size of the staff has been cut from 1,022 when Schubert took over to 780 positions, many of them carrying more responsibility.
So far, 675 of the new jobs have been filled, with 639 of them going to people who already worked for the Red Cross. But only one of the remaining 105 slots, many of them jobs requiring technical skills, is expected to be filled with a current Red Cross employe.
In all, since Schubert took over, 343 Red Cross workers have left the headquarters staff, most of which is located in a complex of three large marble buildings at 17th and D streets NW. In addition to those who were fired, 75 others left voluntarily and 71 retired.
The massive shuffle, which Schubert says is apparently unprecedented in the American corporate world, became a bloodletting that had nothing to do with donors.
During August and September, there was widespread anxiety among staff members, many of them with 20 or more years of service at Red Cross. All were forced to reapply for the reduced pool of jobs if they wanted to stay and all jobs were also opened to outsiders.
Throughout the turmoil, the 47-year-old Schubert was often viewed as the heavy. Now, with the reorganization largely in place, Schubert talks like the coach of a rebuilt football team.
"There's no question we have a much better mix of people," he said. "We have fielded a stronger team."
Schubert said he will "always regret the pain and suffering that was caused" by the reorganization.
"But we did what we had to. We could have done this over a year, but we got it done in about 60 days, with a balance between individual equity and a necessity to get the job done."
Schubert said the reorganization was necessary because the Red Cross had become inefficient, with many of its functions being duplicated by different segments of the organization.
In addition, the 103-year-old organization, which provides services to 3,000 chapters throughout the country and 57 blood centers, had too many middle managers.
There was one manager for every 2.5 workers, but under the new plan, there is one for every 5.4 workers.
Schubert said $3 million was spent on early retirement benefits, job placement efforts and other programs for workers leaving the Red Cross. But he said that by the second year, the reorganization will save $2.9 million on the $56.7 million national headquarters budget.
Swann said she had attended classes sponsored by the Red Cross "to try to learn how to get a job when you're 61. I found it hard enough when I was in my 30s to find work." She said the dismissal left her "violently sick for the first three weeks."
Margaret Owen, a nine-year veteran of Red Cross work and a staunch public critic of the reorganization, sought five jobs, but was not given any of them.
She is, however, on extended Red Cross sick leave while she recuperates from injuries she received in a Sept. 6 car accident.
Schubert said that after Owen, 48, criticized the reorganization, he told subordinates to "bend over backwards" in considering her applications.
He also said he recently offered to help her find work when she recovers from her injuries, but Owen said she will pass on the offer.
"I wouldn't use him with a 10-foot pole," she said.