Facing deep budget cuts, the Smithsonian Institution will impose layoffs, abolish some existing programs and cancel planned expansion, Smithsonian Secretary Robert McC. Adams said yesterday.

Adams said he expects the creation of the National Museum of the American Indian to proceed but virtually everything else -- including the planned African American "presence" on the Mall -- is in question. Also endangered are a $300 million annex to the National Air and Space Museum at Dulles Airport, the redevelopment of the old General Post Office Building at Gallery Place as an office and museum space, an expansion of the Hirshhorn Museum and Sculpture Garden and the addition of "badly needed" storage space at the Museum Support Center in Suitland.

The Smithsonian currently consists of 15 museums and galleries and the National Zoo.

"It's premature to say quite what the effects on the Smithsonian will be of budget decisions that have not yet been made. That they're going to have an adverse effect, a very substantial one, seems to me quite clear," Adams said in an interview from his home in Basalt, Colo., where he spends each summer.

Some small existing programs are likely to be axed by Oct. 1, Adams said, but he declined to provide specifics about that or any other aspect of the belt-tightening anticipated as Congress looks for ways to slash the federal budget.

Adams also refused to delve into last week's firing of Undersecretary Dean Anderson, whose July 20 letter of resignation focused on impending budget cuts and restructuring. Adams had requested Anderson's resignation on July 13, citing a need for improved management because of the financial challenges ahead.

"I don't think discussions of nuances of internal management of the institution ... is something that you can expect to have spelled out," Adams said yesterday.

In a telephone interview yesterday, Anderson was stoical about the dismissal. "He appointed me. He can unappoint me," he said. But Anderson, who will be a senior adviser to Adams after his resignation as undersecretary becomes effective Sept. 1, said he had been developing recommendations about downsizing the institution since early spring.

"It's not as though I was sitting on my hands," he said. "If we had tough decisions to make, then we needed to have the right process. And I could have done it, but it is almost a relief not to have to preside over radical downsizing. The prospect of firing my friends was very unappetizing."

Anderson's dismissal stunned officials at an institution already plagued by flagging morale and profound concern about the money crunch. But Adams discounted the impact of Anderson's departure. "I don't think there is a sense of panic and I don't think there ought to be about the decision of a very capable person to move on at this point. ... This is making a mountain out of a molehill," he said.

At the same time, Adams acknowledged that the personnel roster is likely to be hit hard, since salaries consume about 80 percent of the Smithsonian's budget. The institution "may very well be considerably smaller a year from now, across the board," he said. He declined to estimate the magnitude of the expected cuts. "It's painful and difficult no matter what the percentage," he said.

One reason for his vagueness, Adams said, is that he has not worked out the target budget for fiscal 1992 with the Office of Management and Budget. He remains uncertain about the fate of the institution's pending 1991 request for a $307.7 million appropriation. "There still are no firm decisions to go by," he said. "The budget climate is such that we simply must assume that we'll be pulling in our belts." The Smithsonian's 1990 appropriation was $266 million; its total budget is $353 million including revenue from government contracts and grants and from trust funds.

On Capitol Hill, Rep. Sidney Yates (D-Ill.), chairman of the Appropriations subcommittee on the interior that tomorrow will mark up the Smithsonian's funding bill, said Adams's concern is well founded. The Smithsonian's large budget may make it particularly vulnerable to automatic across-the-board cuts that could be triggered by the Gramm-Rudman-Hollings law, he said. "I am troubled over the amount of money the Smithsonian is requesting," he said. "The budget keeps going up, and they appear to have a deficiency in their trust funds. As that occurs, there appears to be a greater necessity for using federal appropriations."

Adams said an ongoing review of management structure had led to the conclusion that "probably some substantial changes are desirable" even if the budget were not a problem. "I'm not in a position to describe those because they haven't been made yet," he said. But cutting the bureaucracy might enable him to save otherwise endangered programs, he said.

In a spring 1989 petition, 22 of the Smithsonian's 67 museum and office directors told Adams that they were concerned about "a proliferation of staff positions at the management level that as yet seem to contribute to, rather than improve, the confusion." Adams said yesterday that he "felt that criticism was valid for a very long time" but that his flexibility was hampered by "codes on conduct and regulations that are laid down for the federal government."

But staffers throughout the Smithsonian said they were shocked and dismayed over the firing of Anderson. "It's the view of a lot of people that Dean is the person that has held this place together," said one official. "Clearly it's got to be a signal of further change and disruption to come. It hasn't been handled very well."

Said another longtime Smithsonian insider: "It's very widely felt that there is a problem with the leadership. The secretary knows that. But it's as though instead of falling on his own sword, he threw Dean on his sword. Most of us are absolutely stunned."

Speculation on why Adams chose this particular time to take the move ranged from the strategic -- for example, wanting to take control before Congress votes on the Smithsonian budget -- to the practical. "It may have been as simple as his wanting to clear his desk before he went to Colorado for the summer," said one insider.

Anderson said the Smithsonian's financial problems have been exacerbated this year by diminished revenue from entrepreneurial activities. For example, the revenue from such ventures as Smithsonian magazine, the museum shops and the mail order catalogue is expected to be $4 million to $5 million less than projected for fiscal 1990. Those activities netted $25 million in 1989.

"It's a trend line that does not appear to be leveling off," he said. "When you couple that with ... Gramm-Rudman, Congress, taxes and an election year, it compounds the sense that we need to downsize."

Adams's concern about the financial picture of the institution prompted him to take the unusual step of calling a June 26 meeting of about 100 management staffers, whom he instructed to stop thinking about new initiatives and start thinking about protecting the most important parts of the institution. Several who attended the meeting expressed surprise at the level of urgency. "It was very unusual for him to discuss this in such a public forum," said one official.

Despite the grim outlook, Adams said the Smithsonian can survive with some vitality. "I think our challenge is to preserve the strength of the institution," he said. "I would hope to find new ways in which to rise to the occasion. It's going to take some ingenuity and imagination."