Red Cross Lays Off 231 Workers

The American Red Cross, in an effort to reduce costs and streamline the organization, is laying off 231 employees and choosing not to fill an additional 79 positions.

The move involves consolidating financial and human-resource departments at the charity’s biomedical facility in Northern Virginia with those at its Washington headquarters, and paring other positions not directly related to the seven or eight functions spelled out in the organization’s new strategic plan.

The American Red Cross employs about 4,000 people around the country, not including the local chapters.

“The whole goal with the strategic plan is to make the Red Cross the most effective and efficient organization we can be,” according to Bob McDonald, the chief financial officer.

He said the layoffs will save the Red Cross about $34-million, of which $14-million will be shifted to new expenses to strengthen the charity’s core programs, for a net savings of $20-million on its $2.5-billion budget for the fiscal year starting July 1.

Earlier this year, the Red Cross abandoned a plan to increase the dues charged to its 940 chapters by about 6 percent, after protests from the local chapters, many of which have had to lay off staff and make other budget cuts to keep operating. Mr. McDonald said the chapters will likely report an aggregate deficit of around $44-million for the fiscal year ending this month.

The falling price of blood plasma, which Mr. McDonald said had become a commodity with multiple sources of supply, has also had a big effect on its income. Nearly two-thirds of the Red Cross’s revenue comes from the sale of blood products.