R&H Board Votes Major Down-sizing, $1.5 Million in Payroll Cuts
by Monte Sahlin
By AT News Team, April 10, 2014
The Review and Herald Publishing Association (R&H) board voted significant cuts in staff and operations at a special meeting on Sunday (April 6) after year-end reports revealed a loss of nearly $943,000 for operations in 2013 and continued weakness in the first quarter of this year. This came just months after an abortive attempt to merge the two publishing houses operated by the Seventh-day Adventist denomination in the United States.
The board voted a reduction-in-force of 26 current employees, a savings of $1 million in 2014 and more than $1.5 million a year thereafter. The most recent Annual Statistical Report from the General Conference (GC) indicated that R&H had 137 employees, but there is no accounting for full-time equivalency so this may be a 20 to 25 percent reduction in staff.
About half of the RIF will be achieved through "collaborative retirement agreements" with eligible employees. "Redundancies" will be eliminated in several departments and the editorial and the production staff of some periodicals will be reduced.
Operations will be reduced sufficiently to free up about 60,000 square feet of the R&H building visible from Interstate 70 in Hagerstown, Maryland. The board voted to lease out this space not only reducing operational costs but also generating additional income.
The board also voted to reduce the number of new books slated for release in 2015, while at the same time vowing to increase sales starting with the second half of 2014. It has a regular meeting previously scheduled for April 24 which will focus on broader strategic directions for the future, including a possible role for the denomination's North American Division (NAD) in shaping literature ministry in its territory, a move that has been resisted by the publishing houses for decades.
In addition, the R&H board made a number of requests to the GC and the NAD for policy changes which the institution's leadership think will benefit its operations and finances. One of these is a proposal that the contribution R&H makes to the denomination's retirement program be reduced to the level required of Adventist educational institutions.
The entire set of actions voted at the April 6 meeting was labeled a “solvency plan” by the official news release from the Adventist News Network. This reference and the fact that it was felt necessary to have a special board meeting just three weeks prior to one already scheduled indicates how difficult the situation is for the 165-year old publishing house. This despite a move by the GC in the second half of last year to pour cash into the institution by purchasing undeveloped land from R&H with reserve funds which policy permits to be held in securities or real estate, sources have told Adventist Today.
Dr. Delbert Baker, the chairman of the board at R&H and a GC vice president, said that there was a need for quick action to turn around the oldest institution in the Adventist movement. "No faith-based employer ever wants to lose even one employee," said R&H president Mark Thomas. "But we have a greater mission [and] keeping that mission in focus required us to take these hard steps to secure this organization and reposition it for renewed growth."
Last year a study group was appointed to consider the possibility of merging R&H with Pacific Press and placing the new publishing house entirely under the control of the NAD. A number of church administrators told Adventist Today privately that this could result in considerable cost savings and perhaps generate creative, new approaches to publishing ministry. Other expressed concern that a merger might result in "too few voices" and a monopoly for some approaches. Around the first of August the study group was abruptly closed down.